Where does your income go?

[coffeebreath]

ashleyman said:

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.

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.

We have 2 cats and spend £40 a month. Each insurance is £12 each, we buy bulk dry grain-free food for £30 a pop which lasts 2-3 months and they have ~ 3 shot glasses of it a day. Tesco value litter @ less than £2 a bag, 3 bags a fortnight. I'm not the one that pays for them, but I used to be.

My guess is you're buying wet supermarket brand cat food for it to clock up that high? (Cats don't need wet food and feeding them any "leading" supermarket brand that you see on the telly ads is the equivalent of taking your kids to McDonalds everyday.) Either that or your insurance is higher with them being outdoor cats?

[JulianPH]

bmwmike said:

Is compound interest still relevant these days with such small returns?

Stocks and dividend payments I understand.

Holding cash long term relying on compound interest, no thanks. Inflation is higher than any interest you'll get today.

I can see the confusion as we both said compound interest (which is a widely used term) to refer to compounded stock market returns.

[Scootersp]

bmwmike said:

Is compound interest still relevant these days with such small returns?

Stocks and dividend payments I understand.

Holding cash long term relying on compound interest, no thanks. Inflation is higher than any interest you'll get today.

Indeed genuine concern here, reading the house price threads and debt level economics threads it seems like interest rates are to be pinned down long term.

If I was the op I would save and build a month or two of wages up, then switch to paying down the debts and reinstating pension contributions and after that be very careful taking on more.......without being a total hermit/totally tight with everything.

[jimmy156]

I am coming to realise that I will always "skint" in terms of having any money left in the current account at the end (or middle!) of the month!

This was the case when i was a student with no income apart from my student loan.

It was still the case when my wife and I bought our first home when i was earning 17k and my wife not too much more.

It was still the case when we were living in the same house, but our household income had increased by 50% and our mortgage had decreased.

Its still the case now after we have moved house with a bigger mortgage (but overpaying) and had our first child, but with me being a higher rate tax payer and my wife earning more than she ever has!

I find lifestyle / costs always expand to swallow up whatever I earn, and i am coming to terms with being happy with that.

[Edible Roadkill]

jimmy156 said:

I find lifestyle / costs always expand to swallow up whatever I earn, and i am coming to terms with being happy with that.

Sure if you let it it will or you can live humbly and not increase lifestyle / costs just because you can.

Like some people buy a new car every 2 years because they can not because they need to.

I could go out and have the affordability to but a 0.5M house, i chose not to though because the 0.25M one I have fits the bill.

I'm not really believing the more you earn more you spend theory....you have the choice to do so or not.

[jimmy156]

Edible Roadkill said:

Sure if you let it it will or you can live humbly and not increase lifestyle / costs just because you can.

Like some people buy a new car every 2 years because they can not because they need to.

I could go out and have the affordability to but a 0.5M house, i chose not to though because the 0.25M one I have fits the bill.

I'm not really believing the more you earn more you spend theory....you have the choice to do so or not.

We live quite frugally / modestly (haven't had a holiday since our honeymoon 4 years ago, rarely buy alcohol even though i'm partial to a glass of wine or single malt, spend little on clothes and other material things etc.)

We live in the south east so the mortgage is a big cost (only a two bed terrace.) But we chose to move when we could afford to so we could have a garden and a bit more space, same as we chose to have children once were in a position to do so. We could have not done those things and still be living in our flat and we would have a lot more disposable.

I also do have more "contingency" then i had before, as i said we are are overpaying the mortgage and i do put a little away into personal savings as well as some away for our son. But in terms of "spending" money. It is still 0 before the end of the month and has been that way for my entire adult life!

ETA I also pay a signficant % of my gross into my pension pot, that i wasn't doing when we started out.

[ringram]

.. all very conventional with the traditional result. Sweet FA left over.

If it was me I would not have a house. Basically its an anchor and restricts your options for work, life and travel. In effect you have created a prison of your own making.

House share with others, loads of benefits socially, flexibility and cost wise. Room share with the Mrs. You are only 23! I was house sharing from mid teens into my 30's.

Dump the car, use public transport. Or move to a house share near work. (Unless your work requires multiple work locations.. in which case ignore this)

Dump all you can into SIPP and ISA. Reduce your tax which is a partially avoidable waste.

Dont pay the TV tax. You can opt out online. Just stream whatever off the web. Or do some self-education instead and increase your income through training and education.

As Keynes said; its far better to fail conventionally than to succeed unconventionally.

If you dont think and act outside of the box you will end up in the box!

[johnwilliams77]

[redacted]

[jjones]

ringram said:

.

As Keynes said; its far better to fail conventionally than to succeed unconventionally.

Are you sure about that?

[ashleyman]

coffeebreath said:

We have 2 cats and spend £40 a month. Each insurance is £12 each, we buy bulk dry grain-free food for £30 a pop which lasts 2-3 months and they have ~ 3 shot glasses of it a day. Tesco value litter @ less than £2 a bag, 3 bags a fortnight. I'm not the one that pays for them, but I used to be.

My guess is you're buying wet supermarket brand cat food for it to clock up that high? (Cats don't need wet food and feeding them any "leading" supermarket brand that you see on the telly ads is the equivalent of taking your kids to McDonalds everyday.) Either that or your insurance is higher with them being outdoor cats?

Dunno but we don’t get it st food or cheap litter.

It gets the royal whatever dry food, if we feed it anything else it’s usually plain chicken breaststroke or fresh fish. We buy the clumping litter that masks the smells and is flushable and it’s insurance is probably a bit higher cos it’s a pedigree breed.

No idea why I am even justifying costs to you. It costs what it costs.

[coffeebreath]

ashleyman said:

justifying

Comparing

Purebred cat explains your costs.

[thebraketester]

ashleyman said:

Dunno but we don’t get it st food or cheap litter.

It gets the royal whatever dry food, if we feed it anything else it’s usually plain chicken breaststroke or fresh fish. We buy the clumping litter that masks the smells and is flushable and it’s insurance is probably a bit higher cos it’s a pedigree breed.

No idea why I am even justifying costs to you. It costs what it costs.

Chicken breaststroke? Well... what ever makes your cat happy......

[samdale]

Jossman said:

TV License: £35

Unless I've missed it, you still haven't explained this one?

I recently reviewed all my direct debits and saved myself quite a lot per month.
This included cancelling my TV licence. I lost TV signal when the 4G switchover happened. I never did anything about it and didn't really miss it. I have use of Netflix and Amazon prime and just can't justify £12/month for blue planet 2 which was the last thing I watched on iPlayer.

[S9JTO]

Just read through all of this thread at 2AM on a Sunday morning haha, sparked my interest initially because we're the same age, I just turned 23 last week...

I'm going to detail my monthly expenditure as I haven't really done this for a good few months and have changed jobs, bought a new car and new phone since then... Going to use the OP's layout:

Living in NW, living at home
Income £2,230pcm (£36,750 Gross/Year) - Includes employer pension (salary sacrifice into career average scheme): ~£150pcm

LISA contribution: £333pcm into a couple of funds, up a combined 12% since inception - Currently sitting at ~£8.5k
Car finance: £185pcm
Rent: £150pcm
Train: £60pcm (temporarily, will change back to £200pcm after Christmas)
Phone: £40pcm
Spotify: £5pcm
Lottery: £10pcm
E-liquid: £25pcm
Haircut: £25pcm

So, £1,397 remaining.

Spend the remainder on petrol (~£250pcm - Didn't include this in the outgoings as it's more of an entertainment expense as I don't rely on my car to commute), food/drink/beer varies massively month to month but on average about ~£100pcm, most months I'll buy some car parts which probably averages out at about £100pcm. Don't typically buy new clothes, games, gadgets every month but do splurge a few hundred when required so not going to bother...

Tend to stick away £750-£1,000pcm into a separate ISA alongside the LISA depending on the above luxuries.

I pay my car insurance and tax annually (£1,100 and £250 respectively). I'll also have to pay for a service annually (~£250) and tyres (~£400). I tend to spend about £2,000 a year on a few city breaks, few weekends a way in the UK and 'beach holiday' but this varies every year and comes out of my savings which are currently sitting sub ~£2k for the first time since starting work at 18 due to my recent car purchase

Edited by S9JTO on Sunday 23 September 02:26

[GliderRider]

ringram said:

Dump the car, use public transport.

Errr... This is pistonheads!

[Prohibiting]

S9JTO said:

Just read through all of this thread at 2AM on a Sunday morning haha, sparked my interest initially because we're the same age, I just turned 23 last week...

I'm going to detail my monthly expenditure as I haven't really done this for a good few months and have changed jobs, bought a new car and new phone since then... Going to use the OP's layout:

Living in NW, living at home
Income £2,230pcm (£36,750 Gross/Year) - Includes employer pension (salary sacrifice into career average scheme): ~£150pcm

LISA contribution: £333pcm into a couple of funds, up a combined 12% since inception - Currently sitting at ~£8.5k
Car finance: £185pcm
Rent: £150pcm
Train: £60pcm (temporarily, will change back to £200pcm after Christmas)
Phone: £40pcm
Spotify: £5pcm
Lottery: £10pcm
E-liquid: £25pcm
Haircut: £25pcm

So, £1,397 remaining.

Spend the remainder on petrol (~£250pcm - Didn't include this in the outgoings as it's more of an entertainment expense as I don't rely on my car to commute), food/drink/beer varies massively month to month but on average about ~£100pcm, most months I'll buy some car parts which probably averages out at about £100pcm. Don't typically buy new clothes, games, gadgets every month but do splurge a few hundred when required so not going to bother...

Tend to stick away £750-£1,000pcm into a separate ISA alongside the LISA depending on the above luxuries.

I pay my car insurance and tax annually (£1,100 and £250 respectively). I'll also have to pay for a service annually (~£250) and tyres (~£400). I tend to spend about £2,000 a year on a few city breaks, few weekends a way in the UK and 'beach holiday' but this varies every year and comes out of my savings which are currently sitting sub ~£2k for the first time since starting work at 18 due to my recent car purchase

Edited by S9JTO on Sunday 23 September 02:26

Living with parents then I assume? Lucky you! Make hay while the sun shines I say.

[CX53]

Recently gone from being a weekly paid contractor on £24ph, to a weekly paid contractor on £18.50ph and now permy on a salary £41,500pa.

I don’t seem to have much less now than I ever have, which is weird because I definitely do have a lot less! I did find it easier to plan with weekly pay though, and if the car st itself I’d just do some more hours and get the money the following Friday which made life quite easy.

I’ve been living to my means for years and it’s resulted in not having bettered my life at all. Moral of the story, live well within your means and stick some cash aside/buy assets, as well as enjoy some of it too. I just enjoyed the lot, and at 26 have nothing to show for it. Luckily there’s still time

We moved in with my Mrs Mum and Dad a few months back to save for a house deposit, and considering we are saving around £900pcm on rent and bills, we are managing to save a pathetic amount. I need to keep a closer eye on things because I just can’t see where the money goes! Life is more expensive than anyone will ever tell you.

Edited by CX53 on Sunday 23 September 11:23

[S9JTO]

Prohibiting said:

Living with parents then I assume? Lucky you! Make hay while the sun shines I say.

Yeah, as mentioned above

Don’t worry I am!

[Testaburger]

CX53 said:

Recently gone from being a weekly paid contractor on £24ph, to a weekly paid contractor on £18.50ph and now permy on a salary £41,500pa.

I don’t seem to have much less now than I ever have, which is weird because I definitely do have a lot less! I did find it easier to plan with weekly pay though, and if the car st itself I’d just do some more hours and get the money the following Friday which made life quite easy.

I’ve been living to my means for years and it’s resulted in not having bettered my life at all. Moral of the story, live well within your means and stick some cash aside/buy assets, as well as enjoy some of it too. I just enjoyed the lot, and at 26 have nothing to show for it. Luckily there’s still time

We moved in with my Mrs Mum and Dad a few months back to save for a house deposit, and considering we are saving around £900pcm on rent and bills, we are managing to save a pathetic amount. I need to keep a closer eye on things because I just can’t see where the money goes! Life is more expensive than anyone will ever tell you.

Edited by CX53 on Sunday 23 September 11:23

My wife and II moved overseas at about your age, and as a result of the recently ended financial crisis (we were in the US and both lost jobs) , we left with about 3000 cash from a tax rebate, and about 12000 credit card debt. The debt would be cleared with a joining bonus.

One of the biggest factors in turning our finances around was that we reset our monthly costs to zero and started again. It’s all too easy to let small incremental outgoings add up. Netflix, Hulu, phones, gym, cable tv, car insurance, car tax, gym, magazine, newspapers, etc.

With our fresh start, we kept a close eye on everything we signed up for, and sought out the best deals. Once we had a handle on those, everything else was somewhat discretionary, and therefore much easier to spot on your spreadsheet.

Worth a trawl through your expenditure and see where reductions and cancellations can be done. It’s as much about cost control as it is earnings. Earning 41k a year will certainly allow you to achieve some balance of cost control without missing out.

[gangzoom]

Jossman said:

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.

Alot of these things is down to earning power, which will go up as you progress your career.

When I was 23 (doesn't seem that long time ago though am now 36), net pay was roughly 20% of our current combined house hold income.

Things like living costs don't increase that much if your careful- no Sky for us, £25/PCM cover both our phones, shop at Aldi/ASDA etc, so you can how 'spare' cash becomes more avaliable.

Two costs that I should prepare you for in future though.....Kids and divorce.

We are currently paying £1200/month of post tax pat in nursery fees for just ONE toddler, some people have 2-3 kids....you can do the maths.

I have no plans on getting divorced, but a senior colleague recently turned up to work in a Fiat 500, his getting divorced, rells you all you need to know.

By been budget conscious at 23 your already far ahead of most, have a finacial plan, but saving alone wouldnt get you where you want to be, plan your career progression - where do you see yourself in 5-10 years time, and what do you need do NOW to get you there.

.......and spend your savings before the kids come along, marrying someone your not going to divorce is a bonus .

Edited by gangzoom on Monday 24th September 04:30