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Are we doing it right?!
anteatergirl
Posts: 8 Forumite
Hello! 
Long time reader, first time poster.
My partner and I have recently sat down and really worked out our finances properly like grown ups (we're 24 and 27 and have been together for two and a half years, but due to uni and redundancy and things it was all a bit up in the air at the beginning!), and I just wanted to see if we what we were doing was basically right or if there was anything we could do better.
We both earn a decent-ish wage, 23k for me and 25k for him. He has about 18k of student debts, which are being paid off slowly but surely in the normal way and not really a worry in terms of interest. He also has 2k in overdrafts, and I have just under 1k.
I recently found out through one of the brilliant tools here that I am owed a circa 2k tax rebate
so that will pay off his overdrafts (higher interest than mine) in one fell swoop, which is an AMAZING feeling! Once all of our overdrafts are paid off, we plan to save as hard as we can with the hope of getting married and, eventually, buying a house.
The thing is, we live in London and getting a deposit together just seems such an impossible task!
Our take home pay totals 3074, and after rent and bills (including travelcards, overdraft fees and so on) we're left with 1526. The plan is to save 750 per month, and pay 100 a month off of my overdraft. That leaves us with 516 per month 'disposable' income, of which around 200 goes on groceries, toiletries, pet supplies. So we have just over 300 per month 'play' money between us - for going out with friends, little treats (usually wine!) and lunches when we're at work.
Does that sound relatively sensible? I'm embarrassed that we used to waste the 850 per month we're now saving on all sorts of rubbish that we didn't really need, but it still feels like our own home is going to be a long way away saving up 750 at a time! :think:
Thank you so much for reading! I hope I didn't ramble too much....
Long time reader, first time poster.My partner and I have recently sat down and really worked out our finances properly like grown ups (we're 24 and 27 and have been together for two and a half years, but due to uni and redundancy and things it was all a bit up in the air at the beginning!), and I just wanted to see if we what we were doing was basically right or if there was anything we could do better.
We both earn a decent-ish wage, 23k for me and 25k for him. He has about 18k of student debts, which are being paid off slowly but surely in the normal way and not really a worry in terms of interest. He also has 2k in overdrafts, and I have just under 1k.
I recently found out through one of the brilliant tools here that I am owed a circa 2k tax rebate
so that will pay off his overdrafts (higher interest than mine) in one fell swoop, which is an AMAZING feeling! Once all of our overdrafts are paid off, we plan to save as hard as we can with the hope of getting married and, eventually, buying a house.The thing is, we live in London and getting a deposit together just seems such an impossible task!
Our take home pay totals 3074, and after rent and bills (including travelcards, overdraft fees and so on) we're left with 1526. The plan is to save 750 per month, and pay 100 a month off of my overdraft. That leaves us with 516 per month 'disposable' income, of which around 200 goes on groceries, toiletries, pet supplies. So we have just over 300 per month 'play' money between us - for going out with friends, little treats (usually wine!) and lunches when we're at work.
Does that sound relatively sensible? I'm embarrassed that we used to waste the 850 per month we're now saving on all sorts of rubbish that we didn't really need, but it still feels like our own home is going to be a long way away saving up 750 at a time! :think:
Thank you so much for reading! I hope I didn't ramble too much....
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Comments
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Lunches at work? Take a packed lunch.The frontier is never somewhere else. And no stockades can keep the midnight out.0
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If you are really determined to save for a deposit then you will need to reduce your outgoings.
From what you've said (eg lunches at work etc)this is all perfectly possible to help you save a little quicker.
Really, it all depends on what your future plans are.
Do you both feel ready to 'tighten your belts' and go all out to save as much as possible? If so complete a SOA on the Debtfree Wannabe forum and the posters there will give you some excellent advice.
If you want to enjoy your life and take it steady then what you have written seems fine.
Perhaps make a few cutbacks rather than go the whole hog - your choice depending on your circumstances/future plans.0 -
It makes more sense to pay off debts rather than save due to the differences in interest rates.
Check out the house buying, renting and selling board - there is a thread for those who are saving for a deposit. Some people have been saving for quite a while but they are getting there. It can seem a long way away but it will soon come around that you can afford your own place.
Good luck x0 -
Lunches at work is a budget of about £20 a month each - it's a case of buying bread and bits to make sandwiches or cheap noodles etc rather than going to Pret. We both have work kitchens so we don't actually spend any more than we would if we bought the same things in order to make lunch at home.0
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Thanks. That's the idea, to pay off the overdrafts as priority one. Do you mean that we should pay off the student debt before we bother to save, though? Everything else I've read on the subject suggests not (e.g. on this site)It makes more sense to pay off debts rather than save due to the differences in interest rates.
Check out the house buying, renting and selling board - there is a thread for those who are saving for a deposit. Some people have been saving for quite a while but they are getting there. It can seem a long way away but it will soon come around that you can afford your own place.
Good luck x0 -
anteatergirl wrote: »Thanks. That's the idea, to pay off the overdrafts as priority one. Do you mean that we should pay off the student debt before we bother to save, though? Everything else I've read on the subject suggests not (e.g. on this site)
Ignore the student debts, it makes no sense to pay those off.
If you still have 1K of overdraft though you should pay that off asap, you could probably do it in one month rather than taking 10 months and paying interest all that time.
Once you're debt free, then start saving.
I would also warn you that you should have a contingency plan for in case either of you ever loses your job or becomes ill and unable to work.0 -
£300 play money? That's far too much. Cut it down to half of that.
Why is your grocery bill for two people so high? I'd cut that down too.
Depends how hard you want to save. It's tough but you have a lot of disposable money that you can save. Think about the nice treat of having your own house instead of the wine you spend money on.0 -
It includes all pet food, litter, toiletries, cleaning products and so on - we do it all in one fell swoop via online shopping as we don't have a car. This is our first month of this budget and it actually came in at about £130, so we might have to reduce what we allocate for groceries.cocopops21 wrote: »£300 play money? That's far too much. Cut it down to half of that.
Why is your grocery bill for two people so high? I'd cut that down too.
Depends how hard you want to save. It's tough but you have a lot of disposable money that you can save. Think about the nice treat of having your own house instead of the wine you spend money on.
The play money probably could be cut down- I expect we'll have some of it left at the end of this month, so that will be revised as well. I think the main message I'm taking from this is that I was right to think we might be underestimating the amount we could be saving
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Thanks very much. You're absolutely right about my overdraft- the first month's savings will go to pay most of that off, we're just being cautious in case we have made some sort of huge error and end up needing the money for something else (the contingency plan point is a good one, and that's sort of what we're doing with that in the short term. It's definitely something to bear in mind, and once we get a clear picture of how much we can save we'll probably divert some of it into an emergency fund.)Person_one wrote: »Ignore the student debts, it makes no sense to pay those off.
If you still have 1K of overdraft though you should pay that off asap, you could probably do it in one month rather than taking 10 months and paying interest all that time.
Once you're debt free, then start saving.
I would also warn you that you should have a contingency plan for in case either of you ever loses your job or becomes ill and unable to work.0 -
Thanks for the tip about the 'saving for a deposit' thread, I will check that out now. And thanks for the encouragement, I think I just need to be more patient!It makes more sense to pay off debts rather than save due to the differences in interest rates.
Check out the house buying, renting and selling board - there is a thread for those who are saving for a deposit. Some people have been saving for quite a while but they are getting there. It can seem a long way away but it will soon come around that you can afford your own place.
Good luck x0
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