26, no savings feel stuck

Houseplant26

Hi everyone,

I'm new to MSE but I've done some minor lurking for a little while! Everyone is so lovely so I thought I'd join.

Apologies this is long....

I'm looking for advice on how to create a proper budget and stick to it with a view to try and save. I also need someone to tell me I'm doing OK and trying my best and not being as useless as I feel! I feel like my life is kind of on pause and I only ever live week to week. I have no savings or assets at all and I'm 26. I don't earn a lot, I've always worked in the charity sector. Recently I took a pay cut to leave a stressful job for one I love.

I don't have any significant debts apart from my student loan and a planned overdraft that I have had since university. At worst I was £1500 overdrawn when graduated. I've since clawed my way out of this and until recently was in the green. It took two years!

This month trying to pay off at least half of being £500 back in the red for various reasons. Trying to only spend set cash amounts each week after bills paid.

Here's my attempt at a SOA I need to go away and check various paperwork and our joint account to make more accurate.

Take home pay: Variable. I am contracted 4days a week earning 18,000 before tax a year, pro rata. I have the opportunity to pick up some additional shifts, in either my role or supporting in another. Take home pay seems to be around £1,100 a month (I've only been in role few months). Exploring self employed side options now I'm over previous job burnout.

Outgoings:
Pension: My work don't currently have one and I'm not putting anything away individually. I used to contribute to I think government one, £35 pm for about 2.5yrs, need to check what is in it.

Rent: £400 (partner pays slightly more as earns more and I do more of the home related tasks)

Then we each put £150 into our joint account for other household bills (not including food). I *think* this breaks down currently as....

Water (supply & waste): £15 ish
Council tax: My share is about £80 ish. A lot!
Gas: N/A entirely electric flat with one yes one electric heater and a crappy immersion heater for water. This stresses me out and we haven't given readings properly yet apart from once and I'm scared. Need to sort this.
Electricity: £40 at the moment based I guess on our previous metre reading.
Building and contents insurance: Need to get contents insurance, I know that's awful, buildings N/A.

Internet: My share £11
Mobile: £27 (iphone5c 24mnth contract probably half way through so not a lot of scope to change, I don't go over though).
TV licence: Cant remember. We do pay for one though!

Fares and travel: I can walk to work. Maybe £6 a month on the odd bus back from town.

Food, cleaning: I think we spend about £100 a month each on food and cleaning.

Toiletries: I used to spend recently up to a shocking £70 a month some months as this was an area of luxury for me, it helped me feel less poor and better about myself. Sometimes this worked out ok as things last ages etc but I've cut this right back and trying to make it £0 for a while and use up things.
Clothing and footwear: Again varied a lot but could be similar to above. Again trying to cut this completely down!
Hairdressing: I never did anything to my hair apart from trim it and sometimes dye it myself for about 10 years. I then went on my birthday and spent £120 on cut and colour. I felt amazing but now feel I can never afford this again!!

Medicines/prescriptions: Average one prescription a month for my medical conditions so I'd say £9 (I forget current rate!)
Dentist: I'm going to pay £40ish a year to have insurance with private as used to use when NHS. So I guess that's under £5 a month. It's not a lot more than NHS so I think it's worth it.
Opticians: Recently found out I needed glasses and had to shell out £160 on two pairs. Want to try contacts when can afford it. Not sure how I budget per month for my eyes, as could keep glasses for ages!

Sports, hobbies and entertainment: £20ish
No sport, haven't felt able to afford a gym like I used to when earnt more and paid less in rent and council tax. I'd like to be able to afford a class a week and find something I feel I can do and enjoy.

Eating out/take aways: I'd guess currently £20-£30 a month on dinners or lunches out. We tend to avoid takeaways fairly successfully.

Church/charity donations: £13 on two DD + odd big issue so I'd say £15 a month.

At the moment I'm not managing to save anything.
My partner earns a lot more than me but is also very frugal, which is good. He saves a lot. Our financial situations feel quite unequal which gets me downs bit. I feel he'd love to travel more, as would I, but I don't feel I can afford to.

My savings goals would be:
Holiday!!! A hot one!

Emergency fund/fund towards half a deposit on house.

Thoughts?

Thank you so much in advance and for bearing with my long waffly first post.

KxMx

I would keep a spending diary for a month or so, these can be really illuminating and an incentive not to spend frivolously.

I started mine temporarily 10 months ago but it's such a useful tool it's permanent. It's made my money go further and I've increased my savings rate too which I don't think is a coincidence. Before the diary I would have sworn I couldn't do either.

I'd also recommend opening a new bank account which is purely for savings. Set up a small weekly DD to get some funds in there, and when you feel you're not missing that money, increase it by another few quid. Then bung in anything you can scrape together, from a £1 scratch card win to loose change collections once a week.

It takes time but it mounts up.

Houseplant26

KxMx wrote: »

I would keep a spending diary for a month or so, these can be really illuminating and an incentive not to spend frivolously.

I started mine temporarily 10 months ago but it's such a useful tool it's permanent. It's made my money go further and I've increased my savings rate too which I don't think is a coincidence. Before the diary I would have sworn I couldn't do either.

I'd also recommend opening a new bank account which is purely for savings. Set up a small weekly DD to get some funds in there, and when you feel you're not missing that money, increase it by another few quid. Then bung in anything you can scrape together, from a £1 scratch card win to loose change collections once a week.

It takes time but it mounts up.

Thank you so much! That was a LOT of writing to read so I really appreciate the fact someone did.

I've actually started a spending diary this month (from 20th as that's when I get paid).

I'm already finding it hard work, especially when it's food bits and I'm working out what half is and asking partner for other half (we need a better system!)

Thus far:

Week 1: *£50 cash out*
From cash:
D1
£3.95 lunch
£6 groceries

D2 NSD

D3
£15 groceries
£3 half a mini fan for room (yeh it's c*** but it takes up little space and little pennies!!)
£1.45 a can of beer
£1 parking (a friend drove)

D4
£4.70 groceries
£2.00 icecream
£2.50 tip in restaurant we did the nectar points exchange for pizza express, OH paid for a pudding and drinks so I did tip

D5
£13 tea and cake for me and friend (too expensive! Also had to stick on card as was over my initial budget of my final tenner)
£2 lipstick, did not need this but was intrigued to see if good.


Then £24.60 on materials for a side earner bought on card.

Houseplant26

KxMx wrote: »

I would keep a spending diary for a month or so, these can be really illuminating and an incentive not to spend frivolously.

I started mine temporarily 10 months ago but it's such a useful tool it's permanent. It's made my money go further and I've increased my savings rate too which I don't think is a coincidence. Before the diary I would have sworn I couldn't do either.

I'd also recommend opening a new bank account which is purely for savings. Set up a small weekly DD to get some funds in there, and when you feel you're not missing that money, increase it by another few quid. Then bung in anything you can scrape together, from a £1 scratch card win to loose change collections once a week.

It takes time but it mounts up.

Thanks about savings account too.
I in theory have one (with 5p in :rotfl::rotfl::rotfl:) but it's same bank as current account. I think having something more separate might me psychologically more motivating?

Flowers123

Hi Houseplant. If you have lots of things like myself why not try listing some on *bay? I've been doing it the last few days and it's amazing when items sell. Good luck in your journey. I will be following you Flowersx

Houseplant26

Flowers123 wrote: »

Hi Houseplant. If you have lots of things like myself why not try listing some on *bay? I've been doing it the last few days and it's amazing when items sell. Good luck in your journey. I will be following you Flowersx

I don't have a lot to sell (I did a big clear out before I moved to my current home about 6months ago) but I did take some vintage clothes I no longer fit into or never wear to a vintage shop who have offered to sell them and split profit. So far one sale so that's a tenner for me at some point.

Houseplant26

Thinking of joining the use-up-all-your-toiletries thread as looks great and really interesting, but also like quite a lot of work learning all the acronyms and listing stuff.

kingrulzuk

Hiya Houseplant26


I have been reading some of your post and its nice that you want to start saving, but I feel like you don't know what you really want to do.
In one post you say U took a pay cut to leave a stressful job for one I that U love, and in another place you say U want to start ur own side business and U said U have no idea how to start/go about with it right?


What you have to do now is sit down with a nice cup of tea and think hard what you really want to do, saving money is not that hard, making your mind up is the hard part.
I earn around £2200 a month after tax and I save £2000 every month without fail.

Dobbibill

Houseplant26 wrote: »

Hi everyone,

I'm new to MSE but I've done some minor lurking for a little while! Everyone is so lovely so I thought I'd join.


I'm looking for advice on how to create a proper budget and stick to it with a view to try and save. - I've posted a link below for you
I don't earn a lot, I've always worked in the charity sector. Recently I took a pay cut to leave a stressful job for one I love. - As long as you have enough disposable income then job satisfaction/no stress is a better situation IMHO.

I don't have any significant debts apart from my student loan and a planned overdraft that I have had since university. At worst I was £1500 overdrawn when graduated. I've since clawed my way out of this and until recently was in the green. It took two years!

This month trying to pay off at least half of being £500 back in the red for various reasons. Trying to only spend set cash amounts each week after bills paid. - view your OD as a bill and add it to your bills amount and pay off bit at a time if you cannot afford to replenish in one go, be mindful of any charges/fees/interest you pay for using it, factor that into your figures too.

Here's my attempt at a SOA I need to go away and check various paperwork and our joint account to make more accurate.

Take home pay: Variable. I am contracted 4days a week earning 18,000 before tax a year, pro rata. I have the opportunity to pick up some additional shifts, in either my role or supporting in another. Take home pay seems to be around £1,100 a month (I've only been in role few months). Exploring self employed side options now I'm over previous job burnout.

Outgoings:
Pension: My work don't currently have one and I'm not putting anything away individually. I used to contribute to I think government one, £35 pm for about 2.5yrs, need to check what is in it.

Rent: £400 (partner pays slightly more as earns more and I do more of the home related tasks)

Then we each put £150 into our joint account for other household bills (not including food). I *think* this breaks down currently as....

You need to use the same system for a shopping account. Picking up bits and bobs throughout the month soon add up.
If you both contribute an equal amount to this then any excess can be used to save for an EF.

Water (supply & waste): £15 ish
Council tax: My share is about £80 ish. A lot!
Gas: N/A entirely electric flat with one yes one electric heater and a crappy immersion heater for water. This stresses me out and we haven't given readings properly yet apart from once and I'm scared. Need to sort this.
Electricity: £40 at the moment based I guess on our previous metre reading. - Get an up-to-date reading/bill and see if you can save any money by switching providers
Building and contents insurance: Need to get contents insurance, I know that's awful, buildings N/A. - Use TCB/Qu1dco when shopping around for this, I've just renewed my B&C at a net cost of £15 odd for the year.

Internet: My share £11 - this is expensive, shop around
Mobile: £27 (iphone5c 24mnth contract probably half way through so not a lot of scope to change, I don't go over though). - worth asking them if you can get a better deal, if you don't ask, you don't get
TV licence: Cant remember. We do pay for one though! - this is normally £12.12

Fares and travel: I can walk to work. Maybe £6 a month on the odd bus back from town.

Food, cleaning: I think we spend about £100 a month each on food and cleaning.

Medicines/prescriptions: Average one prescription a month for my medical conditions so I'd say £9 (I forget current rate!)
Dentist: I'm going to pay £40ish a year to have insurance with private as used to use when NHS. So I guess that's under £5 a month. It's not a lot more than NHS so I think it's worth it.
Opticians: Recently found out I needed glasses and had to shell out £160 on two pairs. Want to try contacts when can afford it. Not sure how I budget per month for my eyes, as could keep glasses for ages! - go through the cost of the last year plus the cost of contacts and divide by 12, this is not going to be perfect but will give you a starting figure.

Sports, hobbies and entertainment: £20ish
No sport, haven't felt able to afford a gym like I used to when earnt more and paid less in rent and council tax. I'd like to be able to afford a class a week and find something I feel I can do and enjoy.

Eating out/take aways: I'd guess currently £20-£30 a month on dinners or lunches out. We tend to avoid takeaways fairly successfully.

Church/charity donations: £13 on two DD + odd big issue so I'd say £15 a month. - charity begins at home, get your budget right first

At the moment I'm not managing to save anything. - treat savings as a bill/monthly expense. Transfer it on pay day regardless of how big/small the amount is, you have to start somewhere

Thoughts?

Thank you so much in advance and for bearing with my long waffly first post.

Welcome to the forum.

Here is a link to a SOA

It normally takes a few tweaks to get it right so don't be disheartened if you have to re-do it as things pop up that aren't included......that's normal.

My suggestions are in Red.

Allocate every penny a job, whether that's savings, bills, spending money etc etc

Alll the best

eskbanker

Houseplant26 wrote: »

D3
£15 groceries
£3 half a mini fan for room (yeh it's c*** but it takes up little space and little pennies!!)
£1.45 a can of beer
£1 parking (a friend drove)

D4
£4.70 groceries
£2.00 icecream
£2.50 tip in restaurant we did the nectar points exchange for pizza express, OH paid for a pudding and drinks so I did tip

D5
£13 tea and cake for me and friend (too expensive! Also had to stick on card as was over my initial budget of my final tenner)
£2 lipstick, did not need this but was intrigued to see if good.

This will seem a bit harsher than earlier comments, but with the exception of the groceries, most of the above items are easily avoidable if you're really trying to get after clearing your overdraft and then starting to save. Your call and your money of course, so you're quite entitled to some little luxuries here and there, but the old saying about 'look after the pennies and the pounds look after themselves' is very applicable when it comes to understanding how all these little things soon add up.

In other words, if you really want to save, you need to be prepared to make compromises and cut out some of the discretionary spend. Only you can judge how to get that balance right but if I was in your position I'd be looking very closely at most of those non-grocery items and thinking about how they hinder your ability to save....

lstar337

kingrulzuk wrote: »

I earn around £2200 a month after tax and I save £2000 every month without fail.

Feel like I have to weigh in here.

Unless somebody else is paying everything for you, I don't see how this is possible.

Please explain how you live on £200/month, because that wouldn't even cover my monthly council tax commitment.