Quarter life crisis - advice needed on spending & life

Blogger

Hi everyone

I've been reading this forum for a while now and I have adopted many tips for my everyday life but I feel that I still need some help.

My partner and I are living in London and trying to save for our first house and it is getting increasingly difficult. We used to spend what we earned for 2 years but not any more, we did not borrow on credit cards but he still has 11K student loan which comes off his salary every month. During last few months we have managed to cut down spending considerably and now seeking your help to identify any further areas. Here are our monthly and annual budgets.

Monthly ---- Annual figures

• Rent ---- £900.00 ---- £10,800.00
• Council Tax ---- £66.00 ---- £792.00
• Internet & Phone ---- £45.00 ---- £540.00
• Gas ---- £25.00 ---- £300.00
• Skype ---- £20.00 ---- £240.00
• Mobile ---- £30.00 ---- £360.00
• Electricity ---- £15.00 ---- £180.00
• Travel ---- £354.58 ---- £4,255.00
• Coffee ---- £20.00 ---- £240.00
• Toiletries ---- £20.00 ---- £240.00
• Food ---- £300.00 ---- £3,600.00
• Emergency saving ---- £100.00---- £1,200.00
• Necessary clothes ---- £40.00 ---- £480.00
• Gym ---- £120.00 ---- £1,440.00
• Going out / holiday ---- £60.00 ---- £720.00
• Gifts ---- £50.00 ---- £600.00
• Helping mother ---- £240.00---- £2,880.00

Sum---- £2,405.58 ---- £28,867.00

Do you think we can improve in any of these areas?

We are also seeking to up our income. I am studying for accountancy and he is learning how to make apps so we can both increase our income. So in a few years time my salary should increase as well as his.

Already offloading my clothing and other items on ebay to get some extra coming in as well as started some small business which only now starts making small profit.

I joined crazy clothes challenge here on this forum with target spend of 0 for myself excluding necessities.

We do not buy lunch as we make our own and take it to work.

I am not sure what else we can do . We are in our twenties and seems like if we want to start a family we should have no life at all and be on a saving frenzy at all times? How can young people survive in London? Most of our friends live either in rented shared accommodations or at home for free and rely on their parents to help them out with deposits. Everyone I know of who bought a place to live (flat or house) had a major help from parents in terms of deposit.

Sometimes it feels that this life is just a meaningless affair. Live to survive and survive to live? The future is so bleak that I might as well give up and go on benefits

We do not smoke, do not do any drugs, go out no more than once a month and drink occasionally.


I am really looking forward to some ideas..

Ms_Chocaholic

I don't usually post on these boards but I wanted to mention the £240 per month on "helping mother". When I met my now husband, he used to help his mother out so I would be interested on your reasoning for this as it seems quite a large amount.

Tiglath

£300/month on food for 2 people is really quite high; I reckon you could cut it to £160/180 quite easily. Head on over to the OldStyle section for recipes and ideas. Your communications costs are high as well - do you need Skype as well as your internet/phone package? No TV licence? Do you really need to do £50/month on gifts? That's £600/year.

FireWyrm

Blogger wrote: »

Monthly ---- Annual figures

• Rent ---- £900.00 ---- £10,800.00
• Council Tax ---- £66.00 ---- £792.00 This seems awfully low for two people. My band D in the sticks is £20 more a month. Are you sure?
• Internet & Phone ---- £45.00 ---- £540.00 Shop around, there are far better deals than this
• Gas ---- £25.00 ---- £300.00 Weirdly low. I would suspect that you are slipping into debt at this rate.
• Skype ---- £20.00 ---- £240.00 Why? You have a phone
• Mobile ---- £30.00 ---- £360.00 You seem to have a lot of phones in the house. Pick one and ditch the others.
• Electricity ---- £15.00 ---- £180.00 Suspiciously low. I would be checking this
• Travel ---- £354.58 ---- £4,255.00 Travel where? Sometime you have to ask whether the cost outweighs what you get in wages. I'm guessing this is the case. Find another job closer to home?
• Coffee ---- £20.00 ---- £240.00 Seriously? Every month? You're comfortable spending this unnecessarily?
• Toiletries ---- £20.00 ---- £240.00 And again
• Food ---- £300.00 ---- £3,600.00 For two people? My 4 person budget is half this
• Emergency saving ---- £100.00---- £1,200.00 Is this projected, or actual? So, do you actually have an emergency fund, or is this just something that is just planned for the future?
• Necessary clothes ---- £40.00 ---- £480.00 Necessary? Your size fluctuates so much each month you need to spend this? You could easily save this money or put it elsewhere. I dont think I spend £40 every YEAR on clothes. The same ones I had last year fit just fine.
• Gym ---- £120.00 ---- £1,440.00 Walk around the block, its free.
• Going out / holiday ---- £60.00 ---- £720.00 If you're serious about saving, this goes too.
• Gifts ---- £50.00 ---- £600.00 Every month? Cut down.
• Helping mother ---- £240.00---- £2,880.00 This is almost your entire food budget for a month - where is this money going exactly?

Sum---- £2,405.58 ---- £28,867.00

.

Some comments above. I think you could very easily trim your outgoings to the tune of at least £500 a month. Your gym membership is an outragous amount for what you could get for fee. I am suspicious of your stupidly low energy costs, I dont believe it to be honest which means you are actually worse off than you think. If you want to save, you'll have to make sacrifices and this means cutting non essential items out. Your coffee habit isnt essential, it can go. Your food budget is far more than most spend on an entire family, there is plenty of information on trimming that. Toiletries at £20 every month are a complete waste of money for what you get, in fact Boots are in trouble in the paper today for inflating prices above normal for this sort of thing.

Necessary clothing is anything but at £40 a month. Perhaps you can clear out your wardrobe and ebay what you no longer wear. Most women dont wear half of what they have, so to spend more money you dont have is one root of your problem here.

Blogger

Ms_Chocaholic wrote: »

I would be interested on your reasoning for this as it seems quite a large amount.

My mother got divorced last year at the age of 52 which left her with nothing apart from the tiny flat she is living in. No income and no support from my father. He is is supporting my younger sister through her education for now so I am not complaining in a fear that he might change his mind . She's been out of work for 23 years as she was at home raising children and doing all the housework, very old style & religious marriage basically. I am the only child who can support as others are younger so I help her every months with this amount which is enough for her to survive on. At the moment she is doing some fee course learning the office work as well as some bookkeeping but with her health problems I am not hoping for her to be self sufficient for a while and as as child I feel obliged to help her whilst she is going through tough times. She had been rejected from all the blue collar jobs she applied to , not sure if this is her age or lack of recent work experience but this is reality. I do not think I can realistically avoid this cost.

Tiglath wrote: »

£300/month on food for 2 people is really quite high; I reckon you could cut it to £160/180 quite easily. Head on over to the OldStyle section for recipes and ideas. Your communications costs are high as well - do you need Skype as well as your internet/phone package? No TV licence? Do you really need to do £50/month on gifts? That's £600/year.

Hmm I will definitely have a look how I can reduce the food bill. £180 will be VERY tight for the area we live in but always good to challenge what you are doing. Thanks!

We do not watch TV as we are busy and do not like passive entertainment , we both have laptops for news and there is iplayer as well as various demand channels. We decided not to have a TV license as we never watch live TV and license people are ok with that.

As for the skype: we tend not to use phone for any phone calls as it is cheaper per minute on international calls if you use skype but I guess I can try to halve it. My sister is in Germany and I call her from now and then. She is a student so cannot really afford to call me on small allowance my father gives her.

meer53

I'm a single mum aged 55, i have a daughter aged 12 and a son aged 26. I work part time and receive CTC and WTC. I really struggle sometimes, but i manage.

Couldn't your mum get a part time job, doing anything, so that she could manage on her own ? Your mum is going to need your support permanently if you carry on helping her like this. You're trying to save for your own house, will you be able to sustain this support ?

I understand why you want to do it but i think you should have a chat with your mum about it. I would never expect my kids to support me.

My shopping bill for the 3 of us is about £130 a month, why does where you live make a difference ? I shop at Aldi or Lidl, there are stores in most towns now.
I pay £17 per month for 2 mobiles on SIM only contracts.

vics199

Your council tax, gas and electric cannot be right. I have single persons allowance and am in the lowest band of council tax and pay £71 a month, so normally would be about £95. Electricity for me is £25 and gas around £35-£40. If you pay on direct debit then perhaps phone up with accurate meter readings because else you may get a shock when your next post-reading bill comes through and find you are £200+ in the red.

Internet and phone package is far too high, especially if you don't use the phone. Mine is £27 a month including internet, line rental and unlimited off peak calls. I don't even think this is probably the best deal around and I'm going to change it soon. So shop around to cut those costs down.

Food like others have said can be cut. Aim to cut to £200 and then once you are used to that then try to cut even more. I spend £100 on myself for food, but cooking for 2 people together should be cheaper than doubling it so £180 is quite reasonable. Aim to cut out expensive things like takeaways (even supermarket chinese/curry meal deals), anything processed/ready meals (you can batch cook homemade chilli, bolognese, cottage pie etc much cheaper by doing it yourself). By mostly own brand food and try places like Lidl and Aldi for basics.

The gym is extortionate - buy an exercise dvd or go for a run/cycle/walk instead.

Definitely cut the amount you are spending on gifts.

katsu

Blogger wrote: »

Monthly ---- Annual figures

• Rent ---- £900.00 ---- £10,800.00 Would you consider a house share instead of a place of your own - or is this the cost of a house share in London? I wondered from the comments from others about low bills like council tax if you are already sharing? Or, could you take a lodger in with you?
• Council Tax ---- £66.00 ---- £792.00
• Internet & Phone ---- £45.00 ---- £540.00 If you are using skype for international calls, then who are you calling on the house phone? You can get Primus landline for under £10 and the internet has good deals under £20 so you should be able to get at least £15 saving here.
  
• Gas ---- £25.00 ---- £300.00
• Skype ---- £20.00 ---- £240.00 Can you make the free skype to skype calls to e.g. your sister instead of incurring call costs? Look at martin's main site articles - I found Rebtel were amazing value and I could call them in my inclusive minutes so only paid a few p to Rebtel. Check if Skype really is the cheapest deal.
• Mobile ---- £30.00 ---- £360.00 not bad, check you are on the right deals in view of your other call requirements.
• Electricity ---- £15.00 ---- £180.00
• Travel ---- £354.58 ---- £4,255.00
• Coffee ---- £20.00 ---- £240.00 Is this a monthly treat for you both? Can you make it up from other savings, such as on your food budget?
• Toiletries ---- £20.00 ---- £240.00 Is this perhaps makeup? £20 is a lot of soap and deodorant. If it is general toiletries have you thought of trying the threads like "no more buying toiletries" to inspire you to use your stash. Also, shop in the 99p type shops for branded goods that cost more elsewhere. A bottle of shampoo should last you a month, two shower gels and a conditioner plus 2x deodorant would set you back £5.98 saving £16.
• Food ---- £300.00 ---- £3,600.00
• Emergency saving ---- £100.00---- £1,200.00
• Necessary clothes ---- £40.00 ---- £480.00 Do you have a smart job where you have to wear and replace suits? Such clothes aren't cheap. If it is workwear, take a look at outlet malls such as you find near motorway junctions. They offer last season's bits at very low prices. I have stocked up on workwear that way for far less than in the high street.
• Gym ---- £120.00 ---- £1,440.00 Are there cheaper gyms such as council run ones or exercise classes or clubs? Think about if you really want to spend so much money on this.
  
• Going out / holiday ---- £60.00 ---- £720.00 Think about what this goes on and use things like meal deal vouchers, eat before 6 or 7 for cheaper prices etc.
• Gifts ---- £50.00 ---- £600.00 This is quite a bit. Look at sales (see outlet malls above), charity shops, home made gifts etc. Also, sign up for survey sites and see if you can cover say 2 months of this gift allowance over the year - that is possible for one person and fairly easy with two people. Take your payments in say Amazon vouchers or Sainsburys vouchers.
• Helping mother ---- £240.00---- £2,880.00 Applaud your values in helping her. Keep the longer term under review.

Sum---- £2,405.58 ---- £28,867.00 How does this compare to what you earn? How much can you save already?

Do you think we can improve in any of these areas?
Yes and it does not need to make you sad

We do not smoke, do not do any drugs, go out no more than once a month and drink occasionally.


I am really looking forward to some ideas..

Well done for posting. The good news is that I have saved you over £100 a month, more if you did everything I suggested. You could easily hit £250 but would have to make lifestyle choices like drop the gym.

How realistic is your SOA? Have you looked at bank statements and accounted for where all your money is going each month?

Getting on the housing ladder is hard. It isn't essential but you can get there if you want to. Savings are always a good thing to have.

Let us know what steps you take and keep saving - you'll make the MFW board before you know it

All the very best wishes.

Ms_Chocaholic

Blogger wrote: »

My mother got divorced last year at the age of 52 which left her with nothing apart from the tiny flat she is living in. No income and no support from my father. He is is supporting my younger sister through her education for now so I am not complaining in a fear that he might change his mind . She's been out of work for 23 years as she was at home raising children and doing all the housework, very old style & religious marriage basically. I am the only child who can support as others are younger so I help her every months with this amount which is enough for her to survive on. At the moment she is doing some fee course learning the office work as well as some bookkeeping but with her health problems I am not hoping for her to be self sufficient for a while and as as child I feel obliged to help her whilst she is going through tough times. She had been rejected from all the blue collar jobs she applied to , not sure if this is her age or lack of recent work experience but this is reality. I do not think I can realistically avoid this cost.




Hmm I will definitely have a look how I can reduce the food bill. £180 will be VERY tight for the area we live in but always good to challenge what you are doing. Thanks!

We do not watch TV as we are busy and do not like passive entertainment , we both have laptops for news and there is iplayer as well as various demand channels. We decided not to have a TV license as we never watch live TV and license people are ok with that.

As for the skype: we tend not to use phone for any phone calls as it is cheaper per minute on international calls if you use skype but I guess I can try to halve it. My sister is in Germany and I call her from now and then. She is a student so cannot really afford to call me on small allowance my father gives her.

My husband felt obliged to help his mother for years; she too divorced after many years and had been a stay at home mum. Because she had the extra money from my husband, her lifestyle far exceeded ours, my husband supported her because he thought she was destitute. She had also built up huge debts and this added to why he felt obliged to help.

Have you done the sums with your mum to see see is claiming everything she should and to see what your mum has coming in each week and whether she too can cut down on what she buys etc so you do not have to support her so much.

Indebted.Dunce

Blogger wrote: »

My mother got divorced last year at the age of 52 which left her with nothing apart from the tiny flat she is living in. No income and no support from my father. He is is supporting my younger sister through her education for now so I am not complaining in a fear that he might change his mind . She's been out of work for 23 years as she was at home raising children and doing all the housework, very old style & religious marriage basically. I am the only child who can support as others are younger so I help her every months with this amount which is enough for her to survive on. At the moment she is doing some fee course learning the office work as well as some bookkeeping but with her health problems I am not hoping for her to be self sufficient for a while and as as child I feel obliged to help her whilst she is going through tough times. She had been rejected from all the blue collar jobs she applied to , not sure if this is her age or lack of recent work experience but this is reality. I do not think I can realistically avoid this cost.

Well done! :T I think sometimes we tend to forget that there are more important things than money.

I generally tend to refrain from making comments on people's expenses as I think that expenses are very subjective and relative, so I do apologise in advance if I am overstepping the mark:

1. Gym - you could reduce your gym costs by perhaps joining a cheaper gym like the gym group or pure gym.
2. Food - you can perhaps save money on food by doing big biweekly/monthly shops and/or buying in bulk from somewhere like costco.

Blogger

FireWyrm


Council tax- yes, correct. this is only a one bedroom flat we are renting and it is the lowest band.

Energy - it is low as we are never at home during the day. I leave home at about 7, he leaves at about 8 and we are back after 7-8 in the evening or 9 if after the gym. Showers are our biggest energy consumption and we tend to have majority in the gym. The next big one is washing. I wash dishes by hand in cold water and wash clothes one in 2 weeks on low temperature. We have one of those meters where you add 1 pound so we know exactly how much pounds we put in every months. This months it's been 8 so far, I recon another 5 will go in. For gas we have broken meter which British gas tried to fix replace but we can never take free day off work as they cannot guarantee when they can come in to fix it so we pay estimated charge. My last year bill was way below 300, I just checked actually and it was 220.01 for the whole of the last year so 300 is overly estimated I think. Water I do not pay at all as it is included in my rent.

Gym is 60 per month so 120 for both of us. It is a gym in central location, close to big station so we go there straight after work, which makes it easier for us. And we exercise frequently. Sometimes 120 is not too much too pay for 2 people's health. We rarely get sick ( once a year I would say) and spend none on over the counter drugs. Besides round the block walking can be dangerous in London not even counting all the pollution you have to breath in daily

Travel - this is a massive pain! I joined my company 1.5 years ago and they moved outside the London shorty after I joined. I am not in a workplace for awful lot of time and already started my qualification with them. If I leave now i am liable to repay the cost of courses I am doing through them now. Apparently they can legally move within 50 miles radius and this is exactly what they have done to avoid redundancy payments! After few years I can move for sure as I do not intend to be with them forever.

Gifts: we do not spend every month but 600 is the rough figure what we spend over a year includes all presents such as bdays and xmas for the immediate family and each other. Again, this can be cut too... with some effort of course. I bought couple of perfumes at 50% discount this January which my mother and sister love so I am expecting this figure to come under.

Toiletries - how else do you buy shampoo, conditioner, shoer gel, body moisturiser, face cream and all the cosmetics? I recon you are a man hence no need? If anyone can come up soem free way of doing this I would happily welcome!

Emergency saving: this is projected savings for unexpected costs such as medical or dental bills that come up. For example: i have a private healthcare but as per policy I must cover first £150... things like that. I save for future. I put £220 every month into pensions fund and £125 in tax free shares. I am not worried about the retirement , it is just immediate savings pot that I need for my own place . I was thinking of reducing the pensions but then I will loose employer contributions too and since I do not plan to stay with them for a long I want to save maximum I can with them as i am aware of the compounding power of the interest.

Coffee - yes. 2 per cup this equates to 10 coffees, so 5 days per month. Since we are not into drinking or any other form of paid entertainment We do not do xmas shop or cook turkey etc. I thought this is a good way to get SOME pleasure out of life.

Clothes: I agree. I have added this to my budget as it could be unrealistic to spend any in 2013. M&S basic tights cost £6 for 3. They last you maximum 1 month. Work shirts get washed after 1 use ( but once a fortnight), the fabric really cheap and gets ripped. If you buy expensive it last longer but there is a investment cost to start with which will push the budget way over for the next few years. It is like a vicious circle.

Mother- to unemployed mother with some health problems who cannot do very physical work.

Thank you very much for your post! It's useful to look at your life from other person's perspective.

meer53 wrote: »

I understand why you want to do it but i think you should have a chat with your mum about it. I would never expect my kids to support me.

Have you been out of work for extended time? She is trying to get any job but at 53 it is tough... I understand what you mean. Most people would think that this is a massive cost and she might feel that she is a burden to me but I am very grateful the way she raised me and the way I look at it is that this is the least I can do to repay my mother for all she's done for me as I was growing up. I want her to get a job not just because of money but also for her own sake. I am not in a position to comment but I would not wish a grey divorce to anyone.

For mobile phone bill we pay £15 that is pay as you go and includes internet on the phone. I am against contracts so we will never sign up for any BUT we could reduce to 10 maybe? Thanks for the tip!

Shopping again is another area identified and this really seems to be something to work on... I am really impressed with your figure of £130! We have no Aldi or Lidl nearby, not even Asda. We are in Zone 1 and cheapest place around is Tesco. There are also some markets but unless you bulk buy 10KG of onion is not worth it. For 2 of us we would struggle to eat so much before it goes off and since the flat is small we are unable to store things here.. small fridge ad half freezer is all what we have...