Things to include in my monthly budget

Mr_Dangermouse

I expect to have £600 per month after step 3.

It's fairly easy to see how this would lead to no savings. Two nights out a month, one shopping trip and one weekend abroad per month is probably £600.

Mr_Dangermouse

takman wrote: »

Definitely a bad idea! Like bigadaj savings should definitely be a higher priority or you will end up saving nothing at all!.

Without knowing your salary but you say it is "very good" i would look at saving around 30% of it each month before you pay for anything that isn't essential to live. Then also put anything left over at the end of the month into savings as well. But realistically how many people do you know that budget money for fun and have some left over at the end of the month

30% seems extreme to me. In fact if we're talking top line salary then I can't afford to save 30% of it. If it was take home pay, then I could afford it but it would mean never being able to enjoy my life at all and basically just working to live

I could put away 10% and still be able to enjoy life, that may be more realistic. Maybe even 20% on a quieter month.

Dobbibill

PeacefulWaters wrote: »

Search for "statement of affairs" for a more complete list.

Saving is a fairly massive omission.

Here it is http://www.stoozing.com/calculator/soa.php

Ideally, you should give every penny a job.

So income minus *EVERYTHING equals zero

*everything means everything, this includes annual expenses like holidays, Christmas, birthdays, MOT and tax if you have a car, spending money, haircuts, savings for emergencies like washing machine breaking etc etc

I agree with PPs, savings need to be a higher priority or your budget will go belly up at the first curve ball of life.
Savings pots should be allocated on pay day if you calculate your budget to the penny.

Mr_Dangermouse

Dobbibill wrote: »

Here it is http://www.stoozing.com/calculator/soa.php

Ideally, you should give every penny a job.

So income minus *EVERYTHING equals zero

*everything means everything, this includes annual expenses like holidays, Christmas, birthdays, MOT and tax if you have a car, spending money, haircuts, savings for emergencies like washing machine breaking etc etc

I agree with PPs, savings need to be a higher priority or your budget will go belly up at the first curve ball of life.
Savings pots should be allocated on pay day if you calculate your budget to the penny.

Car expenses won't be a factor because I live in London and commute everywhere. Also as a renter, the washing machine isn't an issue for me either.

I think the best thing is to budget all the fixed things leaving a leftover sum and then split that between spending money and saving. I think I could save £200 a month if I only drink twice a month and go abroad only a few times a year.

takman

Mr_Dangermouse wrote: »

30% seems extreme to me. In fact if we're talking top line salary then I can't afford to save 30% of it. If it was take home pay, then I could afford it but it would mean never being able to enjoy my life at all and basically just working to live

I could put away 10% and still be able to enjoy life, that may be more realistic. Maybe even 20% on a quieter month.

Yeah I meant 30% of take home pay but it all depends on how high your rent is and how much you spend on utilities, it's just a number that I use myself as a minimum.

But it's very important to have some savings built up for emergencies. So I would be looking to put away at least £200 of the £600 into a high interest account each month (like the 5% TSB). This will let you build up a nice little amount of money to have just incase of emergencies. Plus also some long term savings.

I know of one person who started savings quite young and invested the money. He was never on a particularly high wage but has paid off his mortgage, extended his house and just retired and a very large sum of money ato 50 years old.

bigadaj

Mr_Dangermouse wrote: »

Car expenses won't be a factor because I live in London and commute everywhere. Also as a renter, the washing machine isn't an issue for me either.

I think the best thing is to budget all the fixed things leaving a leftover sum and then split that between spending money and saving. I think I could save £200 a month if I only drink twice a month and go abroad only a few times a year.

First world problems?

LXdaddy

Mr_Dangermouse wrote: »

Car expenses won't be a factor because I live in London and commute everywhere. Also as a renter, the washing machine isn't an issue for me either.

I think the best thing is to budget all the fixed things leaving a leftover sum and then split that between spending money and saving. I think I could save £200 a month if I only drink twice a month and go abroad only a few times a year.

You are starting to get it I think. We are not saying, don't have a life but we are saying have some savings.


General rule of thumb is that you should have a savings pot of around 6 months salary to cope with emergencies. And that's not really saving for your future that's for coping when the inevitable worst thing happens. For some it could be replacing the washing machine or replacing the car - not for you maybe. But what happens when you loose your existing accommodation and you need to find a new flat - with letting fees, removal costs, month 's rent deposit etc etc.


Key point is make either a fixed % or fixed sum saving as a higher priority in your budget.

p00hsticks

Mr_Dangermouse wrote: »

Can anyone think of anything else I need to budget for?

Clothes
Dental Checkups/treatment
Haircuts

colsten

Mr_Dangermouse wrote: »

Can anyone think of anything else I need to budget for?

Have you ever sat back and seriously thought about where you want to be in 5 years, 10 years, 20 years, may be even more years? And how much money you would need to achieve your goals at all these stages?

What if you lost your job?

What if you were unfortunate and got ill or had an accident?

What if you wanted to start a family?

What if you wanted to buy a house?

What if you wanted to retire long before you can draw a company and/or state pension?

What if your pension payments aren't enough to let you afford the lifestyle you want to live in your retirement?


Just some thoughts.

PennyJar

Hi Mr Mouse,

Definitely save - if only I could go back in time and tell my young graduate self to save (roll eyes big time!). Still have a good time, but try to think long-term and strategically - will I meet the person of my dreams and decide we want to buy our first home (need a deposit), the bigger the better to help with your rate and owe less on a mortgage...plus, while rent is the preferred option for many and I'd never knock people's choices...I would say there's nothing more satisfying than being on the property ladder.

One final thing I was thinking - take a look at some of the mortgage free wannabe boards for some inspiration, - I would particularly recommend Man vs Mortgage for you.

All the best,
PennyJar