Living within my means

Sir_Duke

Hello all,

New to this forum so apologies if this is in the wrong place. I'm 25, living in London and earning a decent enough salary...but I've been spending all of my money, and more! The time has come for me to start saving some of my salary. I've budgeted quite well over the last few months and so have managed to pull myself up from an overdraft of about £1000 and into the black.

I'm starting to think about buying a house, even though it'll be a good few years in the future, and that money has to come from somewhere!

Basic summary:
Income (4 weekly) - £1800
Rent and council tax (monthly) - £750 :eek:
Direct Debits (monthly) - £200 (phone, gym, car etc)

I'm giving myself £100 a week to live (groceries, socialising, petrol) which leaves me with around £450 to save....

But I never have anywhere near that left and end up saving around £100. This diary is to get me to realise the money that I spend and sort that out! Any advice anyone?!

bargainbetty

Try doing it the other way around.... instead of saving what you have at the end of the month, open a new bank account for savings, and a new one for fun. Transfer your fun money for the month, and put at least half of your savings away at the beginning!

Then, you have your fun money card to use for the month. When it's gone, you start staying home.... it worked for me.

Good luck, London isn't the cheapest place to live. You could also look online for free gigs, galleries etc, to save money when you do go out.

McKneff

Post up a proper SOA, statement of affairs and we can help you more.

Sir_Duke

Statement of Affairs and Personal Balance Sheet

Household Information
Number of adults in household........... 3
Number of children in household.........
Number of cars owned.................... 1

Monthly Income Details
Monthly income after tax................ 1800
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1800

Monthly Expense Details
Mortgage................................ 0
Secured/HP loan repayments.............. 140
Rent.................................... 690
Management charge (leasehold property).. 0
Council tax............................. 55
Electricity............................. 10
Gas..................................... 10
Oil..................................... 0
Water rates............................. 5
Telephone (land line)................... 0
Mobile phone............................ 27
TV Licence.............................. 0
Satellite/Cable TV...................... 0
Internet Services....................... 11
Groceries etc. ......................... 100
Clothing................................ 0
Petrol/diesel........................... 100
Road tax................................ 0
Car Insurance........................... 0
Car maintenance (including MOT)......... 0
Car parking............................. 0
Other travel............................ 40
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 10
Pet insurance/vet bills................. 0
Buildings insurance..................... 0
Contents insurance...................... 0
Life assurance ......................... 0
Other insurance......................... 0
Presents (birthday, christmas etc)...... 15
Haircuts................................ 0
Entertainment........................... 20
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 1213

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 5000
Other assets............................ 0
Total Assets............................ 5000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(0)........0
Hire Purchase (HP) debt ...... 5000.....(140)......0
Total secured & HP debts...... 5000......-.........-

Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-

Monthly Budget Summary
Total monthly income.................... 1,800
Expenses (including HP & secured debts). 1,233
Available for debt repayments........... 567
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 567

Personal Balance Sheet Summary
Total assets (things you own)........... 5,000
Total HP & Secured debt................. -5,000
Total Unsecured debt.................... -0
Net Assets.............................. 0

Sir_Duke

Thanks both of you!

bargainbetty - that is a good idea. Maybe it would stop the temptation, especially if there was no overdraft on it! I need to learn to say no to things...

McKneff - See above! Haven't included things that are already paid off for the year e.g. car insurance and tv licence but I think most other things are covered... Leaves me with more money that I thought. Where is it all going??

Dippypud

Like sand through your fingers ...

Easy, it goes in dribs and drabs ... lattes, sandwiches, lunches at work, newspapers, magazines ... gym membership, annual membership to clubs and such ...

Do a diary - any spend write it down or keep the receipts ...

Good luck - cos it's going somewhere ...

BaxUk

Im in a similar boat, will watch with interest as to how you get on!

bargainbetty

Start a third account, and put some money aside for things like car insurance and the TV license - stops it being such a shocker when they do roll around again. Include road tax and some maintenance into your figures too - you're leaving yourself open there!

Are you sure about the gas and electric? They seem very low, as does the water cost.

Sir_Duke

bargainbetty - I share with two others so the bill are split and we pay by monthly direct debit. That's definitely what comes out of my account every month...I hope I won't be hit with a massive bill for the deficit at the end??

I don't have to pay road tax on my car - low emissions. And it's on warranty so I shouldn't have to pay maintenance. I think if anything does go wrong it will have to come out of my savings.

I've taken your advice and opened a third account! Going to use it as a spending account in the next pay cycle and see how I get on

Dippypud - you're right! A little chocolate brownie here, an emergency latte there... It has to stop! I really don't think I can be spending that much though...

BaxUK - Good luck! Feel free to post progress in this thread

Any

I completely agree with Bargain Betty.
You need to do it the other way round.
Open savings account - one that is not too easily accessible, not one that is for example linked to your main account... I had one separate from my bank where transfer would take 3 days and I had different log in details.
This way it is possible to transfer money IF you really struggle, but not too easy for you to just transfer money on a spur of the moment because you want something.
Keep this up for few months until you get used to it, then you can start looking for better rates accounts that might need a notice for withdrawal (to get the best out of your money).

The thing is, if the money is available we look at it occassionaly to see how low we are running. If it is not, we look every day and seeing the available balance dropping we start thinking about that latte every day - we start thinking "but if I just have a cup at work rather then Starbucks, I can go out to Pizza Express with mates on Friday night instead". If you have money readily available, you will just do both. That is why you never save much at the end of the month.

I am now so trained that I don't miss the money going into my savings every month. I have it set up so they leave as soon as I get paid so I don't even see them on my balance (other then for few hours). If you didn't have the money, you couldn't spend them.. so I don't have the money there.

Any

Sir_Duke wrote: »

I don't have to pay road tax on my car - low emissions. And it's on warranty so I shouldn't have to pay maintenance. I think if anything does go wrong it will have to come out of my savings.

You will still have to pay for service?
And what about set of tires after a while? They don't come cheap... And what about a puncture? It can happen to anyone...

Trust me, my car is 2 years old and I have it since it was just under a year and my previous car was also bought at 1 year old and sold at 4 years old, so theoretically under a warranty...
But there is still some expense!!