Can I afford to live alone?

Glencoecheesesticks

Hi all

I'm 27, single with no kids. I think its time for me to live independently, the rent where i live now has gone up twice and probably will next year, so thought might as well get my own place. I've been house sharing for 5 years and sadly silly me didn't save during that time which I now regret. Lesson learnt and will be saving from now on.

I earn £1600 a month (23k annually) and don't have a car and no debt. The studio I'm looking at is £550 per month and a council tax band B which is £1,399.81 and has a EPC rating of B. The property description says electricity bills is estimated £60 per month and water £30. I live in Leeds btw. I've saved £500 for a deposit

I've never had bills in my name before and with all the news about cost of living rising I'm a little worried and anxious to get my own place.

This is what I've estimated

Wage £1600

£550 Rent
£87.48 Council tax (monthly with 25% discount)
£60 Electric
£30 Water
£16 Internet
=743.48

£1600 - £743.48 = 856.52


-£150 food
-£5.99 Netflix
-£9.99 Spotify
-£16 phone bill

= £674.54 remaining

-£500 savings (thinking of reducing this)

Remaining = £174.54 disposable

Does this sound realistic? I'd appreciate any advise.

Thank you.

SavingPennies_2

Given you have a potential extra £500 to tap into (currently reserved for savings) then yes it does sound doable, even if the electricity bill for example goes up - which at £60 it almost certainly will, even for 1 person. Although personally I think £150 doesn't sound like much for food, presuming this is actually groceries and includes cleaning products etc aswell. However, what are your long term plans? I stayed in shared rentals (either with friends/ random people/ partner) because although it can be a bit rubbish it was the only way I could save money to eventually buy my own place. I suppose I'm saying if you can (and want) to save more then it might be better sticking it out for a few more years, but if the difference isn't that much financially then sounds like yes you can afford to go for it.

elsien

Check out what sort of heating the place has. If it’s all electric it’s going to be expensive, particularly with prices hoiking right up again in April. 

Travel costs? 

tryingmybest99

Looks good, but just to check is that £1,600 your take-home pay? On a 23k salary £1,600 is what you'd expect only if you aren't paying off student loan and have no pension (maybe put some money into a pension if you don't already, it is definitely worth it!).

Also the electric looks quite low given the energy crisis. Do you have gas also? Try to find out the rough kWh use of gas and electric of the studio and work out the rough costs from the current rates (it is going up in April and again in October probably).

Also, do you have travel costs? And remember to factor in yearly costs (i.e. holidays, Christmas, birthday presents). And having a social life!

I found the MSE budget calculator really useful and it brought up some items I forgot to budget for so it is worth doing: https://www.moneysavingexpert.com/banking/budget-planning/

Also, I know you didn't ask for advice on savings, but I would consider a LISA if you want to buy a place in future (but be aware there is a big penalty for taking out LISA savings once you put them in). 

theoretica

You will be able to afford to live alone - you may not be able to afford to live alone in the manner to which you have been accustomed.  Living in shared accommodation you may well have had lower bills - and the £500 you are now thinking of saving.  Where has that money been going?  You need to know this, and be able and willing to stop that spending.

HampshireH

Your costs sound good.

I guess the question is can you live on £174.54 a month (I know you have £500 set aside for savings)

If you only have £550 saved for a deposit that's 1 months savings. What have you been spending it all on up till now to not have significant savings? Will you be completely changing your lifestyle? Is that doable?

I'd make sure you add contents insurance to your list. But overall the household bills side sounds affordable.

Ideally you want to get a few months bills etc saved incase anything goes wrong but you should be able to do that if £174 is doable for a few months

ReadingTim

You probably will be able to afford it, but you're unlikely to be able to save as much as you currently do, as living alone is likely to be more expensive than sharing.  So whatever it is you're saving up for will take longer to buy, and will cost more due to the effects of inflation.  And if inflation/the price rises faster than you can save, you may never be able to afford it.  

So it really comes down to instant, or delayed gratification, and the trade offs associated with each.  If it's a place of your own you hope to save for, the choice may be continue to live with people until you can afford to buy somewhere of your own, or ditch the flatmates and rent alone, but never be able to buy for yourself.  

saajan_12

Glencoecheesesticks said:

Hi all

I'm 27, single with no kids. I think its time for me to live independently, the rent where i live now has gone up twice and probably will next year, so thought might as well get my own place. I've been house sharing for 5 years and sadly silly me didn't save during that time which I now regret. Lesson learnt and will be saving from now on.

I earn £1600 a month (23k annually) and don't have a car and no debt. The studio I'm looking at is £550 per month and a council tax band B which is £1,399.81 and has a EPC rating of B. The property description says electricity bills is estimated £60 per month and water £30. I live in Leeds btw. I've saved £500 for a deposit - will you also need money for moving costs / pots & pans / first months rent? 

I've never had bills in my name before and with all the news about cost of living rising I'm a little worried and anxious to get my own place.

This is what I've estimated

Wage £1600  - to check this is your take home? Sounds like it accounts for tax & NI, but any student loans / pension contributions? 

£550 Rent - sounds perfectly in line with typical affordability criteria at 1/3 of income. 
£87.48 Council tax (monthly with 25% discount)
£60 Electric
£30 Water
£16 Internet - line rental / broadband / TV licence? 
=743.48 

£1600 - £743.48 = 856.52


-£150 food  - remember that now includes all household consumables eg toilet roll, cleaning stuff, kitchen stuff, 
-£5.99 Netflix
-£9.99 Spotify
-£16 phone bill - what do you get for this? can probably reduce to ~£5 / month on a sim only?

= £674.54 remaining - expenses mostly sound fine. 

-£500 savings (thinking of reducing this) - so you were spending this before (plus any savings on rent / bills)? Need to understand what it was on, as you'll need to actively stop / reduce those else you won't actually save anything. 

Remaining = £174.54 disposable - to me that would be plenty for a bit of eating out / clothes / toiletries / entertainment. Is it for you? 

Does this sound realistic? I'd appreciate any advise.

Thank you.

Personally sounds realistic, and in line with the recommended 33:33:33 split between rent, bills and savings/leisure. However until now, your split was probably more like 25 rent : 75 leisure, so you need to figure out what exactly the leisure spend was and whether you will really stop those. 

ProDave

WELL done for doing a proper budget, and well done for choosing a property with EPC B so hopefully the running costs will be lower.

Murphybear

Most properties are unfurnished these days and often include a cooker but no white goods.  

Do you have furniture and white goods etc?  Kitting out a new home can be very expensive.

do you have an IKEA within easy distance?  Not to everyone’s taste but are budget friendly.  Large charities often have furniture in stock and you can advertise on Freecycle. People who are downsizing often have loads of stuff for free.

getmore4less

No need for new there is plenty of  cheap or  free stuff about to kit out a home its transport that can be an issue for the bigger things.


The key here is a full SOA  and it will be worth doing one for 2021 to see where your money has been going.
https://www.lemonfool.co.uk/financecalculators/soa.php

Assuming you are on the same money where has £19,200 gone in 2021

Then you can do a plan for 2022

You need to know what you will be cutting out if you have been spending it all up to now.