Where does your income go?
Discussion
To the Op... I’m a regular reader of the finance section and it’s worth remembering that Pistonheads demographic is made up of people who’ve probably done alright for themselves, often 40s plus and is not in the slightest bit representative of most people’s financial situation. Equally, Pistonheads is also a place where some are rather economical with the truth, so don’t believe every ‘where should I invest 50k?’ post.
To be owning your own home in modern times is a significant achievement so don’t get disheartened.
To be owning your own home in modern times is a significant achievement so don’t get disheartened.
[quote=Jossman]Hi all,
I'm 23 and last month I completed my house purchase with SWMBO.
I've been lurking on P/H for a long time now and always see discussions on how people are overpaying mortgages by 100%, or maximizing pension payments, investment portfolios, etc.
It all seems so far fetched to me at the moment, being able to distribute one's income into so many different places whilst seemingly having plenty left for everything else that comes with every day living.
Whilst I can appreciate my wages are low and I'm a 'youth' - I feel as though I'm far, far away from others in a similar age group and similar stages of their careers.
So this thread, really, is kind of a sanity check for me in all honesty that I'm not doing something wrong at this stage in life, and probably a bit of a reassurance to others in a similar position to me that P/H isn't all powerfully built directors with diverse investment portfolios and overflowing pension pots.
I enjoy reading the Finance section of the Forum but it does leave you with a sense of doom and gloom sometimes.
So where does your income go?
A vague illustration:
Living in SE, Homeowner.
Income £1,750pcm (£26,000 Gross/Year)
Joint account direct debit: £750pcm (SWMBO Matches this)
Includes:
Mortgage: £925
Gas/Electric: £80
Water: £20
Council Tax: £115
Broadband: £25
TV License: £35
Car insurance (her car, but we both drive it often, so split the insurance bill evenly): £50
Any remaining goes towards the household shop, and any home expenses, if anythings left it stays in the joint account to build a buffer/build savings.
So, £1,000 remaining.
Paying off a 0% credit card: £150pcm
Paying off an existing debt: £325pcm - Full disclosure, these are poorly planned 12 month 0% finance purchases. This comes down to £150pcm after December.
Car tax: £22pcm
Phone bill: £15pcm
Phone itself: £45pcm - Finishes December.
Petrol: Approx £120pcm
So we're down to approximately £320pcm remaining.
Now having written it all down, I realise I fall into the typical young person category of living beyond the breadline and taking on too much in the pursuit of material things, so thankfully this is changing towards the end of the year when I reach the end of the terms on a lot of my outgoings.
When these terms finish, I'll essentially be beginning 2019 with £540ish remaining each month.
I guess I know why I find things tight, it's my own fault -d'oh-
My goal going into 2019 is to start paying into my pension again (stopped when job changed and wage dropped off for a while) and to get my remaining debts cleared. I was going to prioritise saving over clearing debt, but I figured clearing debt would be the more sensible option.
Where does your income go? What are your goals? Do you struggle and do you know why?
I hope this thread helps some people, in some way, not sure how but it might just make you happy knowing you're not alone if you're crap with cash! Posting this has helped me realise I've been an idiot with cheap credit so I guess there's a positive already!
Thanks..
You sound unhappy/trapped, my advice for you,
sell the house, dump the girl, pay off any loans, move abroad, find any work that pays the rent, avoid other expats, learn the language, look for opportunities and most importantly listen!
You worry too much!
Go and enjoy yourself and forget about pensions,mortgages and loans.
[/quote
I'm 23 and last month I completed my house purchase with SWMBO.
I've been lurking on P/H for a long time now and always see discussions on how people are overpaying mortgages by 100%, or maximizing pension payments, investment portfolios, etc.
It all seems so far fetched to me at the moment, being able to distribute one's income into so many different places whilst seemingly having plenty left for everything else that comes with every day living.
Whilst I can appreciate my wages are low and I'm a 'youth' - I feel as though I'm far, far away from others in a similar age group and similar stages of their careers.
So this thread, really, is kind of a sanity check for me in all honesty that I'm not doing something wrong at this stage in life, and probably a bit of a reassurance to others in a similar position to me that P/H isn't all powerfully built directors with diverse investment portfolios and overflowing pension pots.
I enjoy reading the Finance section of the Forum but it does leave you with a sense of doom and gloom sometimes.
So where does your income go?
A vague illustration:
Living in SE, Homeowner.
Income £1,750pcm (£26,000 Gross/Year)
Joint account direct debit: £750pcm (SWMBO Matches this)
Includes:
Mortgage: £925
Gas/Electric: £80
Water: £20
Council Tax: £115
Broadband: £25
TV License: £35
Car insurance (her car, but we both drive it often, so split the insurance bill evenly): £50
Any remaining goes towards the household shop, and any home expenses, if anythings left it stays in the joint account to build a buffer/build savings.
So, £1,000 remaining.
Paying off a 0% credit card: £150pcm
Paying off an existing debt: £325pcm - Full disclosure, these are poorly planned 12 month 0% finance purchases. This comes down to £150pcm after December.
Car tax: £22pcm
Phone bill: £15pcm
Phone itself: £45pcm - Finishes December.
Petrol: Approx £120pcm
So we're down to approximately £320pcm remaining.
Now having written it all down, I realise I fall into the typical young person category of living beyond the breadline and taking on too much in the pursuit of material things, so thankfully this is changing towards the end of the year when I reach the end of the terms on a lot of my outgoings.
When these terms finish, I'll essentially be beginning 2019 with £540ish remaining each month.
I guess I know why I find things tight, it's my own fault -d'oh-
My goal going into 2019 is to start paying into my pension again (stopped when job changed and wage dropped off for a while) and to get my remaining debts cleared. I was going to prioritise saving over clearing debt, but I figured clearing debt would be the more sensible option.
Where does your income go? What are your goals? Do you struggle and do you know why?
I hope this thread helps some people, in some way, not sure how but it might just make you happy knowing you're not alone if you're crap with cash! Posting this has helped me realise I've been an idiot with cheap credit so I guess there's a positive already!
Thanks..
You sound unhappy/trapped, my advice for you,
sell the house, dump the girl, pay off any loans, move abroad, find any work that pays the rent, avoid other expats, learn the language, look for opportunities and most importantly listen!
You worry too much!
Go and enjoy yourself and forget about pensions,mortgages and loans.
[/quote
FredClogs said:
f
k knows... I mean I've got a spreadsheet and that suggests I should have about £200 a month left after bills and savings are taken out, wife similarly, yet every month... fk all... Teetering around the edge of overdraft this time of the month, every month...
To the guy up the thread who's spending £80 a month on his cat...! For reals? It better not be the one that sts on my lawn, I hope that's insured because if I find the fker it's going to need time with a vet!
The £80 is insurance, food, litter etc... We over-estimate what it requires and any extra is left in joint account towards any unexpected bills, same with the rest. It’s mostly all rounded up. k knows... I mean I've got a spreadsheet and that suggests I should have about £200 a month left after bills and savings are taken out, wife similarly, yet every month... fk all... Teetering around the edge of overdraft this time of the month, every month...To the guy up the thread who's spending £80 a month on his cat...! For reals? It better not be the one that s
ts on my lawn, I hope that's insured because if I find the fker it's going to need time with a vet! In regards to the rest of your post, it was my cat and you hurt it and I found out about it, you’d have more to worry about than your precious lawn.
Jossman,
Just to echo the general sentiment on this thread, I’d be proud of your achievement so far. You’ve obviously made sacrifices to achieve your place on the property ladder at your age. At 23, that’s not to be sniffed at.
To me, it looks like you’ve got some fairly typical debt that people fall into. It isn’t crippling, but you’re realising that it needs to go. Once that’s gone, you’ll actually have a decent disposable income.
Being unable to invest in the markets via pension contributions due to debt repayments isn’t necessarily a bad thing at the moment. There’s some volatility about and gains in the short term are by no means assured. This is an ideal opportunity to be disciplined about buckling down to ditch your debt. Once that’s gone, treat you and your good lady to a weekend break in the countryside or something as a new beginning - then you can look to invest that money into a pension (to take advantage of the tax relief), or if the markets are spooky, overpay your mortgage.
It’s worth pointing out that contributing to a pension fund in earnest at your age will provide 45-odd years of compound interest - which is HUGELY advantageous to even starting in your mid-thirties. Quick (rough) example;
400 quid a month earning 7% for 45 years will leave you with 1.5 million at the end.
400 quid a month earning 7% for 35 years will leave you with just over 700k.
So, you’re increasing the investment term by a third(ish) but more than doubling your return.
Also bear in mind that you’ll only have to invest 340 of your own money, and the government will top that up to 400. I realise there are lifetime limits, and what not, but the point still stands. If you hit that, then you’re onviously doing something right!
I think the important thing is to have a plan, which it seems you’re formulating, and stick to it. As your pay rises, you can adjust the figures to increase investment or mortgage contributions, but the above example shows that if your wage was stagnant, you’re still going to be in a position to take great care of your family with a bit of discipline.
You’ll potentially be mortgage free in your late 40’s with 25 years of investments for your future, and a further 20-odd years to invest heavily when free from the shackles of the mortgage.
Stay on that path!
Just to echo the general sentiment on this thread, I’d be proud of your achievement so far. You’ve obviously made sacrifices to achieve your place on the property ladder at your age. At 23, that’s not to be sniffed at.
To me, it looks like you’ve got some fairly typical debt that people fall into. It isn’t crippling, but you’re realising that it needs to go. Once that’s gone, you’ll actually have a decent disposable income.
Being unable to invest in the markets via pension contributions due to debt repayments isn’t necessarily a bad thing at the moment. There’s some volatility about and gains in the short term are by no means assured. This is an ideal opportunity to be disciplined about buckling down to ditch your debt. Once that’s gone, treat you and your good lady to a weekend break in the countryside or something as a new beginning - then you can look to invest that money into a pension (to take advantage of the tax relief), or if the markets are spooky, overpay your mortgage.
It’s worth pointing out that contributing to a pension fund in earnest at your age will provide 45-odd years of compound interest - which is HUGELY advantageous to even starting in your mid-thirties. Quick (rough) example;
400 quid a month earning 7% for 45 years will leave you with 1.5 million at the end.
400 quid a month earning 7% for 35 years will leave you with just over 700k.
So, you’re increasing the investment term by a third(ish) but more than doubling your return.
Also bear in mind that you’ll only have to invest 340 of your own money, and the government will top that up to 400. I realise there are lifetime limits, and what not, but the point still stands. If you hit that, then you’re onviously doing something right!
I think the important thing is to have a plan, which it seems you’re formulating, and stick to it. As your pay rises, you can adjust the figures to increase investment or mortgage contributions, but the above example shows that if your wage was stagnant, you’re still going to be in a position to take great care of your family with a bit of discipline.
You’ll potentially be mortgage free in your late 40’s with 25 years of investments for your future, and a further 20-odd years to invest heavily when free from the shackles of the mortgage.
Stay on that path!
FredClogs said:
...I earn close to 6 figures and live in a cheap area of the country, I earned over 6 figures for much of my late 20s and 30s, and I don't work particularly hard...
FredClogs said:
fk knows... I mean I've got a spreadsheet and that suggests I should have about £200 a month left after bills and savings are taken out, wife similarly, yet every month... fk all... Teetering around the edge of overdraft this time of the month, every month...
k knows... I mean I've got a spreadsheet and that suggests I should have about £200 a month left after bills and savings are taken out, wife similarly, yet every month... fk all... Teetering around the edge of overdraft this time of the month, every month...
Edited by anonymous-user on Saturday 22 September 06:15
fblm said:
FredClogs said:
...I earn close to 6 figures and live in a cheap area of the country, I earned over 6 figures for much of my late 20s and 30s, and I don't work particularly hard...
FredClogs said:
fk knows... I mean I've got a spreadsheet and that suggests I should have about £200 a month left after bills and savings are taken out, wife similarly, yet every month... fk all... Teetering around the edge of overdraft this time of the month, every month...
k knows... I mean I've got a spreadsheet and that suggests I should have about £200 a month left after bills and savings are taken out, wife similarly, yet every month... fk all... Teetering around the edge of overdraft this time of the month, every month...
fblm said:
FredClogs said:
...I earn close to 6 figures and live in a cheap area of the country, I earned over 6 figures for much of my late 20s and 30s, and I don't work particularly hard...
FredClogs said:
fk knows... I mean I've got a spreadsheet and that suggests I should have about £200 a month left after bills and savings are taken out, wife similarly, yet every month... fk all... Teetering around the edge of overdraft this time of the month, every month...
k knows... I mean I've got a spreadsheet and that suggests I should have about £200 a month left after bills and savings are taken out, wife similarly, yet every month... fk all... Teetering around the edge of overdraft this time of the month, every month...Edited by fblm on Saturday 22 September 06:15
I do save quite a lot of money as I'm self employed and look after my own pension and even though I live in a cheapish area I do have a biggish house and a decent sized mortgage... Ha ha and now I'm justifying myself to a anonymous Internet stalker... Oh dear... How sad.
40% to household bills, including mortgage, food, bills & insurance policies
40% to savings across P2P lending, stocks and shares etc
20% for anything else, usually days out, meals, clothes and hobbies.
It used to be very different a few years ago, but I managed to clear all my debt apart from the mortgage and put those debt payments into savings instead - it did take some willpower and sacrifices but it's worth it in my opinion.
I work away for the majority of the week which helps me save a fortune in food, entertainment and transport costs.
40% to savings across P2P lending, stocks and shares etc
20% for anything else, usually days out, meals, clothes and hobbies.
It used to be very different a few years ago, but I managed to clear all my debt apart from the mortgage and put those debt payments into savings instead - it did take some willpower and sacrifices but it's worth it in my opinion.
I work away for the majority of the week which helps me save a fortune in food, entertainment and transport costs.
EddieSteadyGo said:
So he reached the heady heights of earning "6 figures".... maybe just not in GBP
Sounds truehttps://www.pistonheads.com/members/showcar.asp?ca...
Viz top tip for savers who use Specsavers in their monthly outgoings --don't!
Costco as well as selling premium brand oil at half the price of Halfrauds etc also do a very good line in contact lens/solutions/glasses at about half the monthly price of Specsavers and other outlets...
Every penny helps :-)
Being very selective also about the fun cars you buy can also mean almost cost free motoring or even profit, plus having a "shed" for commuting will reduce outgoings tremendously if you can live with the image lol.
A friend who earns decent money as does his wife is always in borderline debt or in loans as both of them "need" less than 2 yr old high spec SUV type vehicles for their 20 min trips to work or shopping. The depreciation or cost of having this makes me wince. They have no "emergency fund" incase anything happens to one or both of them and a huge mortgage noose. I think the general advice is 3 months outgoings or so in reserve just incase generally for most people in working situations.
Costco as well as selling premium brand oil at half the price of Halfrauds etc also do a very good line in contact lens/solutions/glasses at about half the monthly price of Specsavers and other outlets...
Every penny helps :-)
Being very selective also about the fun cars you buy can also mean almost cost free motoring or even profit, plus having a "shed" for commuting will reduce outgoings tremendously if you can live with the image lol.
A friend who earns decent money as does his wife is always in borderline debt or in loans as both of them "need" less than 2 yr old high spec SUV type vehicles for their 20 min trips to work or shopping. The depreciation or cost of having this makes me wince. They have no "emergency fund" incase anything happens to one or both of them and a huge mortgage noose. I think the general advice is 3 months outgoings or so in reserve just incase generally for most people in working situations.
At 23 my income covered my rent and food and I wavered between making ends meet and running short every month.
That probably went on until I was well into my 30s.
Only started to become properly solvent in my late 30s and don't become comfortable until I managed to pay off my mortgage in my mid 40s.
I'd say you were doing really well, and imho it's better to be struggling when you're young, can work hard, and can see your salary on an upward trend than at the other end of your life.
That probably went on until I was well into my 30s.
Only started to become properly solvent in my late 30s and don't become comfortable until I managed to pay off my mortgage in my mid 40s.
I'd say you were doing really well, and imho it's better to be struggling when you're young, can work hard, and can see your salary on an upward trend than at the other end of your life.
EddieSteadyGo said:
fblm said:
FredClogs said:
...I earn close to 6 figures and live in a cheap area of the country, I earned over 6 figures for much of my late 20s and 30s, and I don't work particularly hard...
FredClogs said:
fk knows... I mean I've got a spreadsheet and that suggests I should have about £200 a month left after bills and savings are taken out, wife similarly, yet every month... fk all... Teetering around the edge of overdraft this time of the month, every month...
k knows... I mean I've got a spreadsheet and that suggests I should have about £200 a month left after bills and savings are taken out, wife similarly, yet every month... fk all... Teetering around the edge of overdraft this time of the month, every month...I've never properly drilled down the full spread of the household in's vs out's, I don't think I could handle having a spreadsheet.
Between me & wife we bring in around 8k a month once tax/ni/pension deductions.
Mortgage is 1180
Council tax is 245
120 gas & electric
Don't have any loans
Credit card which is run as monthly cash flow and used to buy nearly everything shopping eating out etc normally equates to about 1500 but can be a lot more.
Got one car on a lease plan which is 147 quid a month. Other car is owned.
Rest goes between our savings, kids savings, isa's, I put 400 a month in company share plan each month, often overpay the mortgage or occasionally just go an extra holiday if we want.
Keep thinking about buying a sports car or a classic or something along those lines but have managed to resist temptation so far. Done a fair amount of fast car ownership in my 20's, now
Mid 30's and 3 kids in I am more cautious with money and frivolous purchases.
We're pretty comfortable financially and I like that money is not a constraint however we definitely live within our means and plan for the future.
Between me & wife we bring in around 8k a month once tax/ni/pension deductions.
Mortgage is 1180
Council tax is 245
120 gas & electric
Don't have any loans
Credit card which is run as monthly cash flow and used to buy nearly everything shopping eating out etc normally equates to about 1500 but can be a lot more.
Got one car on a lease plan which is 147 quid a month. Other car is owned.
Rest goes between our savings, kids savings, isa's, I put 400 a month in company share plan each month, often overpay the mortgage or occasionally just go an extra holiday if we want.
Keep thinking about buying a sports car or a classic or something along those lines but have managed to resist temptation so far. Done a fair amount of fast car ownership in my 20's, now
Mid 30's and 3 kids in I am more cautious with money and frivolous purchases.
We're pretty comfortable financially and I like that money is not a constraint however we definitely live within our means and plan for the future.
My self and "Her" put £300 each into a joint bank account this covers all household bills and food. It even covers household repairs. No mortgage, paid off some years ago. Roof is covered in solar panels, so fuel is cheap even if I have to buy LPG to heat the house. I repair things myself, so these costs are minimal. Cars are all paid for, and I don't work.I live off investments and savings. So far this month I have spent £482 this includes my contribution to the joint bank account, and all my bills are paid. This week the joint account has a surplus of £1300 of which £700 will be needed for this winters gas. Most years we spend whatever surplus we have on some house related project. Its about working to cut costs not compromise on what we want. I will not spend money needlessly, but I will buy stuff if I want to. It is very easy to live well for very little.
First you need to get more going into the pot, second you need to minimise what goes out of it.
When I was about your age, I read 'The Magic of Thinking Big', by David J Schwartz. Around the same time I read 'How to Win Friends and Influence People' by Dale Carnegie and 'How to Master the Art of Selling', by Tom Hopkins. You may think they are books that are just for people in sales, but you are too; you need to sell yourself, either to your own employer to get a significant raise, or to another employer who values your abilities and future potential higher than your current employer does.
If when you look at job descriptions, there are skills or knowledge required that you don't have, read up on them. James Dyson, the vacuum cleaner man, reckons any one can learn in six months as much about a subject as a degree course will teach you. Everything you need to know is the click of a mouse away these days. You do need to sort the wheat from the chaff though. Remember that job descriptions are a wish list. If the employer can find someone with most of the skills and they have a good attitude and a desire to learn, they will take them.
With regard to outgoings, there is always a cheaper way of getting what you want. One Christmas the girlfriend & I went looking at jackets. The one I really liked was £300, which I wasn't going to pay. I set up an eBay search for that jacket in my size, and within a couple of weeks I got an unworn one, for £45. I do the same for car parts. Set up a search for parts by all the alternate numbers either from an eBay listing or on Kakapart, and often find the parts at a fraction of the price because the seller doesn't know or hasn't said what it fits. I'm probably one of the more highly paid people where I work (I'm a contractor) but I begrudge paying the premium for one pint bottles of milk for my coffee, so I buy a six pint bottle and transfer some into a small bottle which I keep in the work fridge which keeps me going for a couple of days. Each saving is small, but the sum total is significant. If you shop at, Starbucks, Costa Coffee, motorway services (for anything) or filling stations for anything other than fuel, you're giving other people money that could have been your future nest egg.
When I was about your age, I read 'The Magic of Thinking Big', by David J Schwartz. Around the same time I read 'How to Win Friends and Influence People' by Dale Carnegie and 'How to Master the Art of Selling', by Tom Hopkins. You may think they are books that are just for people in sales, but you are too; you need to sell yourself, either to your own employer to get a significant raise, or to another employer who values your abilities and future potential higher than your current employer does.
If when you look at job descriptions, there are skills or knowledge required that you don't have, read up on them. James Dyson, the vacuum cleaner man, reckons any one can learn in six months as much about a subject as a degree course will teach you. Everything you need to know is the click of a mouse away these days. You do need to sort the wheat from the chaff though. Remember that job descriptions are a wish list. If the employer can find someone with most of the skills and they have a good attitude and a desire to learn, they will take them.
With regard to outgoings, there is always a cheaper way of getting what you want. One Christmas the girlfriend & I went looking at jackets. The one I really liked was £300, which I wasn't going to pay. I set up an eBay search for that jacket in my size, and within a couple of weeks I got an unworn one, for £45. I do the same for car parts. Set up a search for parts by all the alternate numbers either from an eBay listing or on Kakapart, and often find the parts at a fraction of the price because the seller doesn't know or hasn't said what it fits. I'm probably one of the more highly paid people where I work (I'm a contractor) but I begrudge paying the premium for one pint bottles of milk for my coffee, so I buy a six pint bottle and transfer some into a small bottle which I keep in the work fridge which keeps me going for a couple of days. Each saving is small, but the sum total is significant. If you shop at, Starbucks, Costa Coffee, motorway services (for anything) or filling stations for anything other than fuel, you're giving other people money that could have been your future nest egg.
GliderRider said:
First you need to get more going into the pot, second you need to minimise what goes out of it.
When I was about your age, I read 'The Magic of Thinking Big', by David J Schwartz. Around the same time I read 'How to Win Friends and Influence People' by Dale Carnegie and 'How to Master the Art of Selling', by Tom Hopkins. You may think they are books that are just for people in sales, but you are too; you need to sell yourself, either to your own employer to get a significant raise, or to another employer who values your abilities and future potential higher than your current employer does.
If when you look at job descriptions, there are skills or knowledge required that you don't have, read up on them. James Dyson, the vacuum cleaner man, reckons any one can learn in six months as much about a subject as a degree course will teach you. Everything you need to know is the click of a mouse away these days. You do need to sort the wheat from the chaff though. Remember that job descriptions are a wish list. If the employer can find someone with most of the skills and they have a good attitude and a desire to learn, they will take them.
With regard to outgoings, there is always a cheaper way of getting what you want. One Christmas the girlfriend & I went looking at jackets. The one I really liked was £300, which I wasn't going to pay. I set up an eBay search for that jacket in my size, and within a couple of weeks I got an unworn one, for £45. I do the same for car parts. Set up a search for parts by all the alternate numbers either from an eBay listing or on Kakapart, and often find the parts at a fraction of the price because the seller doesn't know or hasn't said what it fits. I'm probably one of the more highly paid people where I work (I'm a contractor) but I begrudge paying the premium for one pint bottles of milk for my coffee, so I buy a six pint bottle and transfer some into a small bottle which I keep in the work fridge which keeps me going for a couple of days. Each saving is small, but the sum total is significant. If you shop at, Starbucks, Costa Coffee, motorway services (for anything) or filling stations for anything other than fuel, you're giving other people money that could have been your future nest egg.
Smart. I think like you but struggle to put it into practice!When I was about your age, I read 'The Magic of Thinking Big', by David J Schwartz. Around the same time I read 'How to Win Friends and Influence People' by Dale Carnegie and 'How to Master the Art of Selling', by Tom Hopkins. You may think they are books that are just for people in sales, but you are too; you need to sell yourself, either to your own employer to get a significant raise, or to another employer who values your abilities and future potential higher than your current employer does.
If when you look at job descriptions, there are skills or knowledge required that you don't have, read up on them. James Dyson, the vacuum cleaner man, reckons any one can learn in six months as much about a subject as a degree course will teach you. Everything you need to know is the click of a mouse away these days. You do need to sort the wheat from the chaff though. Remember that job descriptions are a wish list. If the employer can find someone with most of the skills and they have a good attitude and a desire to learn, they will take them.
With regard to outgoings, there is always a cheaper way of getting what you want. One Christmas the girlfriend & I went looking at jackets. The one I really liked was £300, which I wasn't going to pay. I set up an eBay search for that jacket in my size, and within a couple of weeks I got an unworn one, for £45. I do the same for car parts. Set up a search for parts by all the alternate numbers either from an eBay listing or on Kakapart, and often find the parts at a fraction of the price because the seller doesn't know or hasn't said what it fits. I'm probably one of the more highly paid people where I work (I'm a contractor) but I begrudge paying the premium for one pint bottles of milk for my coffee, so I buy a six pint bottle and transfer some into a small bottle which I keep in the work fridge which keeps me going for a couple of days. Each saving is small, but the sum total is significant. If you shop at, Starbucks, Costa Coffee, motorway services (for anything) or filling stations for anything other than fuel, you're giving other people money that could have been your future nest egg.
GliderRider said:
With regard to outgoings, there is always a cheaper way of getting what you want. One Christmas the girlfriend & I went looking at jackets. The one I really liked was £300, which I wasn't going to pay. I set up an eBay search for that jacket in my size, and within a couple of weeks I got an unworn one, for £45.
I do this too. It's very good and I've managed to save thousands over the years just by being patient or looking for a good deal.I also never buy clothes full price unless they're limited release. I usually always wait until the sales and buy stuff then. I also practice only buying good products because buy cheap, buy twice.
As others have said, quite refreshing to see figures rather than percentages. I'm typically British on the subject of money, but as this is an anonymous forum I've no issue posting figures.
I don't track it in quite as much detail as some, but here goes:
Post deductions (tax/NI/pensions) income: c.£6,500 (For two people)
Household: £760 [Includes all household bills, grocery shopping and so on]
Transport: £600 [Includes PCH vehicle, all bills, train for my partner]
Social: £700 [Going out/socialising/fun stuff]
Total £2,060
This leaves about £4.5k 'spare', some of which goes on larger one off purchases like holidays (perhaps 10-15% of the surplus funds), the rest is saved/invested. When the lease deal finishes on my car next year, I intend to buy something which will reduce the total outgoings by c.£300 per month.
We paid off the mortgage a couple of years ago which is why the 'Household' spend is quite low and we don't have children, which judging by friends who have children, is a huge financial burden we've skipped!
I don't track it in quite as much detail as some, but here goes:
Post deductions (tax/NI/pensions) income: c.£6,500 (For two people)
Household: £760 [Includes all household bills, grocery shopping and so on]
Transport: £600 [Includes PCH vehicle, all bills, train for my partner]
Social: £700 [Going out/socialising/fun stuff]
Total £2,060
This leaves about £4.5k 'spare', some of which goes on larger one off purchases like holidays (perhaps 10-15% of the surplus funds), the rest is saved/invested. When the lease deal finishes on my car next year, I intend to buy something which will reduce the total outgoings by c.£300 per month.
We paid off the mortgage a couple of years ago which is why the 'Household' spend is quite low and we don't have children, which judging by friends who have children, is a huge financial burden we've skipped!
Testaburger said:
Jossman,
Just to echo the general sentiment on this thread, I’d be proud of your achievement so far. You’ve obviously made sacrifices to achieve your place on the property ladder at your age. At 23, that’s not to be sniffed at.
To me, it looks like you’ve got some fairly typical debt that people fall into. It isn’t crippling, but you’re realising that it needs to go. Once that’s gone, you’ll actually have a decent disposable income.
Being unable to invest in the markets via pension contributions due to debt repayments isn’t necessarily a bad thing at the moment. There’s some volatility about and gains in the short term are by no means assured. This is an ideal opportunity to be disciplined about buckling down to ditch your debt. Once that’s gone, treat you and your good lady to a weekend break in the countryside or something as a new beginning - then you can look to invest that money into a pension (to take advantage of the tax relief), or if the markets are spooky, overpay your mortgage.
It’s worth pointing out that contributing to a pension fund in earnest at your age will provide 45-odd years of compound interest - which is HUGELY advantageous to even starting in your mid-thirties. Quick (rough) example;
400 quid a month earning 7% for 45 years will leave you with 1.5 million at the end.
400 quid a month earning 7% for 35 years will leave you with just over 700k.
So, you’re increasing the investment term by a third(ish) but more than doubling your return.
Also bear in mind that you’ll only have to invest 340 of your own money, and the government will top that up to 400. I realise there are lifetime limits, and what not, but the point still stands. If you hit that, then you’re onviously doing something right!
I think the important thing is to have a plan, which it seems you’re formulating, and stick to it. As your pay rises, you can adjust the figures to increase investment or mortgage contributions, but the above example shows that if your wage was stagnant, you’re still going to be in a position to take great care of your family with a bit of discipline.
You’ll potentially be mortgage free in your late 40’s with 25 years of investments for your future, and a further 20-odd years to invest heavily when free from the shackles of the mortgage.
Stay on that path!
^^^^^^ This!Just to echo the general sentiment on this thread, I’d be proud of your achievement so far. You’ve obviously made sacrifices to achieve your place on the property ladder at your age. At 23, that’s not to be sniffed at.
To me, it looks like you’ve got some fairly typical debt that people fall into. It isn’t crippling, but you’re realising that it needs to go. Once that’s gone, you’ll actually have a decent disposable income.
Being unable to invest in the markets via pension contributions due to debt repayments isn’t necessarily a bad thing at the moment. There’s some volatility about and gains in the short term are by no means assured. This is an ideal opportunity to be disciplined about buckling down to ditch your debt. Once that’s gone, treat you and your good lady to a weekend break in the countryside or something as a new beginning - then you can look to invest that money into a pension (to take advantage of the tax relief), or if the markets are spooky, overpay your mortgage.
It’s worth pointing out that contributing to a pension fund in earnest at your age will provide 45-odd years of compound interest - which is HUGELY advantageous to even starting in your mid-thirties. Quick (rough) example;
400 quid a month earning 7% for 45 years will leave you with 1.5 million at the end.
400 quid a month earning 7% for 35 years will leave you with just over 700k.
So, you’re increasing the investment term by a third(ish) but more than doubling your return.
Also bear in mind that you’ll only have to invest 340 of your own money, and the government will top that up to 400. I realise there are lifetime limits, and what not, but the point still stands. If you hit that, then you’re onviously doing something right!
I think the important thing is to have a plan, which it seems you’re formulating, and stick to it. As your pay rises, you can adjust the figures to increase investment or mortgage contributions, but the above example shows that if your wage was stagnant, you’re still going to be in a position to take great care of your family with a bit of discipline.
You’ll potentially be mortgage free in your late 40’s with 25 years of investments for your future, and a further 20-odd years to invest heavily when free from the shackles of the mortgage.
Stay on that path!
OP - You have done incredibly well to have purchased a house at the age of 23 and you are evidently not 'crap with cash!'.
Do remember the power of compound interest (above) when it comes to long term savings. Whether you use a pension or an ISA (just in case you need to access some of it in an emergency) the principle is the same.
If you carry on as you are doing you should be set up in life so relax and enjoy!
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