How much disposable income is comfortable?

moomoomama27

Gavin83 wrote: »

I'm curious, what do people consider a good amount of disposable income per month?

At least £500 after everything has gone out.

suicidebob

£100+ per week for frivolities

SanguineSteve

A goldfish will always grow in proportion to the size of it's tank.

browneyedbazzi

getmore4less wrote: »

Nothing restrictive you don't have to share budget are about planning properly and making choices budgets empower and give control of your future.

You might not find it restrictive and may find it empowering but we are all different and may feel differently about things. If that style of budgeting works for you and you find it empowering that is brilliant - you should carry on! That doesn't mean it will work for everyone.

Part of your issue is you have a skewed view of what's disposable income, its what's left after essentials.

Eg. Some clothes are essential, gym is discretion from disposal.

Disposable in the thread title may have been the wrong word. What I actually described in the OP is fixed costs vs discretionary/variable spending. For me, my household bills, gym membership, car payments, insurance, tax, petrol and groceries are all fixed (or relatively stable) costs that I need to account for each month. Other things like clothing, nights out, entertainment gifts and holidays are not stable fixed costs so they come out of the 'left overs' and whether I spend any money on those things or how much I spend will vary depending on the circumstance.

What a budget and soa gives is more clarity.

The reality is those with more money need a budget more than those that struggle if you want to avoid just throwing money away.

Dithering is because you don't have clarity of your finances.

Dithering is because I have a tendency to over think things and am generally not the most decisive person.

74jax wrote: »

I have about £300-400 a month disposal and hubby has £2500+ I manage on mine and hubby on his . I think it's relative to the individual.

Can you use to pay debts off earlier? If you don't need it to spend.

I don't have any debt other than my mortgage and we've already made the maximum allowed overpayments on the mortgage, so no. The loan I am looking at for the car does allow over payments so when I have extra money available I do intend to over-pay to reduce the amount of interest paid over the life of the loan.

NoAngel wrote: »

Have you considered using your savings to buy a car instead of paying for a new one that will depreciate very quickly?

I won't buy a brand new car - the plan is to buy one that is about 2 years old so the big initial hit of depreciation has past. At 2 years old it is approximately 40% cheaper than it would have been new. The car I really really love is a new model this year so you can't get a 'nearly new' one and I would have had to buy it brand new. I think my second choice car at 2 years old is a good balance - efficient modern engine, low mileage, some manufacturer's warranty left and up to date tech (bluetooth, digital radio etc) without the worst of the depreciation.

As far as using savings to buy it - I like to have the savings cash available in case it is required and as borrowing is so cheap at the moment I think it makes sense to use a loan.

I did a lot of sums yesterday and when you take into account what my current car is costing me (more on petrol, tax and repairs) the net effect of buying the new car is fairly small - the difference should be quite easily absorbed. Looking forward to getting it now

pinkteapot

theoretica wrote: »

This! How much disposable income do you currently have and what are you spending it on that will have to change?

This!! How much other people live on is actually less relevant than what £7k per year is compared to what you have now. How much less per month are you going to have than you're used to?

If someone used to spending £70k per year suddenly tried to live on £7k they'd struggle. If someone with £7.5k dropped to £7k they'd be fine.

DH and I have a monthly budget. Total income less regular outgoings = disposable income. Of that, we choose to save £x per month and spend £y per month.

If our outgoings increase (eg a new monthly bill is added), we look at whether to reduce our savings, our spends, or a bit of each.

Look at it monthly, not annually. Do a proper budget of income, then outgoings (mortgage/rent, all your bills, car repayments) and see what's left. See how much (relatively - in percentage terms), this car repayment is going to change your disposable income by.

getmore4less

browneyedbazzi wrote: »

IAs far as using savings to buy it - I like to have the savings cash available in case it is required and as borrowing is so cheap at the moment I think it makes sense to use a loan.

Thats just throwing money away

Spend the saving and rebuild them from the money you were going to spend on the car.

If something comes up then borrow if you don't have enough if nothing comes up you never need to borrow.

Don't forget to also start saving for the next car so you don't have to borrow for that one.

dawyldthing

£7k to me seems a lot. But with the petrol and the like it can soon eat it up. I spend around £250 a month and could cut it down if needed. Plus I have a pot for holidays and the like too. It all depends how you choose to do it

maman

Gavin83 wrote: »

I'm curious, what do people consider a good amount of disposable income per month?

I don't see it as a finite number. For me it's being able to cover all regular bills and then treat myself by paying for holidays/clothes/gifts/meals out without having to touch savings. All this depends on how extravagant your tastes are and how good you are at living within your means.

trailingspouse

Income 20 shillings, expenditure 19 shillings and sixpence, result happiness. Income 20 shillings, expenditure 20 shillings and sixpence, result misery.

So long as you cover you essential outgoings, everything else is a bonus.

browneyedbazzi

dawyldthing wrote: »

£7k to me seems a lot. But with the petrol and the like it can soon eat it up. I spend around £250 a month and could cut it down if needed. Plus I have a pot for holidays and the like too. It all depends how you choose to do it

Regular expenses including petrol and groceries etc were already accounted for so wouldn't be coming out of the £7k....I've come to the conclusion that it'll be fine. I always have more than the car payment amount left over at the end of the month and the new car will be cheaper on tax and petrol (and less likely to need repairs) so I should still end up with a bit of a 'buffer'.

I bought the car today