My 4-Weekly Budget - Should I be saving more?

ddraig_goch

Hi,

I'm an 18 year old who is living at home and have recently been started to put together a budget planner, because I feel like I could save more and a spend less. Just wanted to see whether others think this is a viable budget:

GROSS 4-Weekly Income: ~£1500
Dedictions: ~279.07
Tax: ~102.55
NI: ~97.32
Work Retirement Plan: ~48.00 (4% of salary, which gets doubled from work)
Work Share Scheme: 25.00
Work Union: 6.20

Savings: ~£602.50 (Could be more depending on my earnings)
LISA (for home): 200.00
LISA (for retirement): 26.25
SIPP: 26.25
Emergency Fund: 250.00 (will reduce when I get a big enough stash)
Gifts (Birthdays/Xmas): 100.00

DDs/SOs: ~£134.97
Housekeeping: 100.00
SIM Contract: 10.00
Netflix: 11.99
Barclays Rewards: 3.00
Amazon: 7.99
HP Ink: 1.99

Expenses: £450.00
Food/Commute: 300.00
Clothes/Drinking Out etc.: 150.00


It would be interesting to see if I save more or less than other people in my situation. While I'm at home I'm currently saving ~45% of my salary (including pensions)... Should I aim to be saving more?
I also worry that I don't leave enough in my current account (roughly £35) at the end of each month, would this go against me for future dealings with my bank?

klew356

As an 18 year old you seem to have the head screwed on and to be in a position to save into 2 isa’s and contribute to a pension is a very good thing, well done.

If you want to save more look into what you are spending on commuting and food, break down what you are spending on food and see if you can save on the commuting. Chances are probably not. If you eat out a lot take a packed lunch.

Stay in and don’t go out but you are 18, enjoy yourself!
:money: :j

Blackbeard_of_Perranporth

Good start in life and good fortune.

iarniee

Wish I was as smart as you at 18.

You're saving more than enough, keep it up.

Just work hard and as your wage increases, save more!

I'd maybe review the going out + food spend.

Like said above, packed lunches for work.

Take advantage whilst living with family.

Anonymous101

I wouldn't worry about your savings rate too much. You're doing brilliantly. As others have said you've got your head screwed on financially which is unusual for someone of your age.


I've posted this several times before but I think its really important. It would have been to me anyway!

I'd recommend you read and listen to everything you can on Financial independence Retire Early (FIRE). All of it may not be applicable to you but since you're looking in on here at a relatively young age you seem like the type that would be open to it. You can be as radical or as laid back about the approach as you like, its not all or nothing, but I feel like the principles would benefit anyone and everyone.

If you start by reading the two links below. Particularly the Mr Money Mustache article. If you've never heard of him he's an American chap that managed to retire by 30.

The choose fi links below is a good place to start with a good overview. They also do a podcast which I've put a link to the introductory one below. Most of their podcasts are interviews with people that are working on their own terms after adopting the principles of FIRE in one way or another.

https://www.choosefi.com/the-why-of-fi/

https://www.choosefi.com/financial-independence-beginners-guide/

https://www.mrmoneymustache.com/2012/01/13/the-shockingly-simple-math-behind-early-retirement/

Hopefully you'll find them interesting and useful.

Terry_Towelling

Looks like a great start!

Some observations (just personal opinions)

Birthdays/gifts is too much.
Clothes/drinking is way too much - what's the split between clothes and booze?
Netflix and Amazon outgoings - do you get good value out of these?
You need to split out food and commute into separate lines for people to know how much is actually going on food and how much is unavoidable commute.
What does the £100 Housekeeping cover?

I don't know, but I'd say you are probably saving a lot more than most 18-year olds who still live at home.

Just keep being active in the way you manage your finances and keep tweaking things. Keep one eye on the future and how things look likely to change so you can adapt in advance.

TheShape

If you are intending to buy a property in the near future I'd prioritise the LISA (for home). I wouldn't split out an amount for retirement and I'd divert other savings to it including the SIPP savings.

I'd probably only do this is you're intending to buy in the next few years though as you'll likely use a Cash LISA and the low interest rates available will erode the value of the bonus over time. You might make use of regular savers in the meantime.

ddraig_goch

Thanks for all the replies guys/gals - I'm going to try my hardest to stick to this and take advantage of being at home and save as much as I possibly can.
Also thanks @Anonymous101, I will definately take a look at those links, it's 100% something that I've been thinking about and want to achieve.

I do definately need to get better at the little things like taking packed lunches to work, as I'm eating in a cafe most days at work and spending maybe £5ish on food at work a day.

Birthdays/gifts is too much.

We have quite a large family, so I've worked out that this is roughly the amount that I would need to save, and by putting this much away every month I don't need to look for money as such at Christmas.

Clothes/drinking is way too much - what's the split between clothes and booze?

I probably shouldn't have just put clothes and drinking.... But this money is used for if I do anything that month like going to the cinema, eating out, drinking, buying clothes or any sort of luxories.

Netflix and Amazon outgoings - do you get good value out of these?

Yeah, so we all share them both within the house. And I pay for them, as weird as it sounds, as part of my housekeeping. We're all forever watching something on Netflix/Amazon Prime Video and I also use Amazon Prime Music because it's included, instead of subscribing to the likes of spotify. Also handy for Same-Day/Next-Day Delivery on emergency purchases.

You need to split out food and commute into separate lines for people to know how much is actually going on food and how much is unavoidable commute.

So commuting, I usually spend around £50, and the other is used for food, toiletries and any other essentials.

What does the £100 Housekeeping cover?

So it's money I pay my parents for rent.

I'd probably only do this is you're intending to buy in the next few years though as you'll likely use a Cash LISA and the low interest rates available will erode the value of the bonus over time. You might make use of regular savers in the meantime.

So.... I have an Investment LISA with HL, in which the money I put in is invested into funds and when the bonuses reach the minimum to buy more units of the fund, I invest it. I also top it up by a few quid now and again to make sure there's enough in there for any fees that occur. I'm not looking to move out until I'm around 25, so I can whack a nice deposit down.

Thanks again!

Duckyduck

You look to be off to a great start! I’d probably pause the SIPP for now and divert that to the LISA if I were you - partly so it’s available for a house deposit if you need a bit extra, but also because the 25% bonus is similar to the tax relief now, but the LISA won’t be subject to income tax when the time comes to take the money out, but the SIPP might. If/when you max out the LISA limits or become a higher rate tax payer then you could resume the SIPP.

20SmthngSver

When you say a LISA for retirement and a LISA for a home, you can't have two Lifetime ISA's. You can only have one. It's to be used for either or, not both as such. You can buy a house with it and reduce to a £1, and then start saving for retirement.

I'm 27 and I earn just under £1500 net, and I save 70% a month. I have £100 into a pension and save about £900 a month.

jonnygee2

I'm an 18 year old who is living at home and have recently been started to put together a budget planner, because I feel like I could save more and a spend less. Just wanted to see whether others think this is a viable budget:

Your intention is very good and your budget is reasonable. Specifically though, you asked for feedback and this would be mine.

GROSS 4-Weekly Income: ~£1500
Dedictions: ~279.07
Tax: ~102.55
NI: ~97.32
Work Retirement Plan: ~48.00 (4% of salary, which gets doubled from work) Personally I would set to 10%. It seems like a lot but if you set it at that now you will get used to it. And at 10% starting at 18 your retirement will look after itself. I can't tell you how many times I wish I'd managed to start my pension contributions at 18
Work Share Scheme: 25.00
Work Union: 6.20 Good to be in a union!

Savings: ~£602.50 (Could be more depending on my earnings)
LISA (for home): 200.00
LISA (for retirement): 26.25 Ditch this and increase your workplace contributions
SIPP: 26.25Ditch this too
Emergency Fund: 250.00 (will reduce when I get a big enough stash)
Gifts (Birthdays/Xmas): 100.00 That's £1300 / yr in gifts? You must have some very good friends!

The spending section is reasonable. But, it also takes time and experience to get your spending budgets right, so remember to track them carefully and review them regularly. I'd split them down into more specific categories too. Have you seen You Need a Budget?

The main trick with budgeting is to track your budget carefully over a full year. It is very easy to live on a tight budget for a month, but if it is too tight it will inevitably slip over a year. A bit like dieting, it has to be sustainable long term, not a crash diet.