Tips for being less crap with money?
Discussion
red_slr said:
I think its about convenience with the current "younger" generation. They, IME, see for example £900 a month rent as just normal and they can give notice any time and a month later they are out. All their friends pay the same so its just "normal".
They see a 25 year mortgage at £750 a month for the same property as a life sentence and I think by 35 most realise perhaps renting was not the best idea as along term solution. Mortgages are as cheap as they are ever going to be. When I was in my early 20s my mortgage was 50% of my take home. Most of that was interest. I still had to put down a 10% deposit. My income was significantly lower than what it would be today too. Mortgages today are about half the cost of what I was paying, on a lower income.
In London it’s the deposit and stamp duty that’s a killer. Minimum £50,000, which is not easy/impossible to save for most people.They see a 25 year mortgage at £750 a month for the same property as a life sentence and I think by 35 most realise perhaps renting was not the best idea as along term solution. Mortgages are as cheap as they are ever going to be. When I was in my early 20s my mortgage was 50% of my take home. Most of that was interest. I still had to put down a 10% deposit. My income was significantly lower than what it would be today too. Mortgages today are about half the cost of what I was paying, on a lower income.
I did it, but that’s because I earn a 6 figure salary, and even then I live in a pretty crap part of south east london.
Yep the deposit is the issue.
Unless you have parental help or are raking it in salary wise, it takes forever to save even a modest amount if you are shelling out £1k a month on rent, never mind any other living expenses... I know as it's what i've been trying to do for the last couple of years..
Unless you have parental help or are raking it in salary wise, it takes forever to save even a modest amount if you are shelling out £1k a month on rent, never mind any other living expenses... I know as it's what i've been trying to do for the last couple of years..
Robertj21a said:
Of course , the deposit on your first house is a lot less if you buy away from the higher priced areas !
For many who have a good income, but struggle to find a sizeable deposit, it may be better to move further out and commute in.
Or work away from London... I grew up there and quickly realised that in my line of work, I earn more after tax living and working in Dorset than the equivalent job in London because of cost of living. People I grew up with just won’t learn that outside of the M25 there are other cities...For many who have a good income, but struggle to find a sizeable deposit, it may be better to move further out and commute in.
Anything you don't NEED, and you buy regularly…
Canteen lunch at work is £4:95, which I bought 98% of the time. A tin of perfectly acceptable chicken curry and a microwaveable rice is £2:35, that’s £2:60/day saved, which over a working year (227 days) is getting on for £600. I don't eat it anything like every day obviously… I used to have a cup of coffee from the onsite Costa every day too, that was £1:70/day, so that’s another £380+. A £1k a year saved out of taxed income, that’s nearly £1300-ish on salary.
This doesn’t include changing your phone contract, Sky, Prime, drinking once a week instead of twice, unused gym memberships, magazine subs, the list is endless.
As others, I run a spreadsheet as to where it all goes, and Tesco/Asda is a standout item, but I need to eat (maybe not as much!) so anything that can reduce this bill is watched.
A mate gets a big take away every single Friday night for a family of 3, they aren’t exactly flush, but he doesn’t get change out of £35!. £1800 p.a. on food which isn’t that great anyway. Cottage pie and an Aldi bottle of red would cost a tenner.
If you take away the unavoidable, like gas, electricity, water, rates, petrol, rent/mortgage etc… etc… the amount of money actually left for “spends” for many people may be only £3K p.a.. add a £1-2K on to that from above, and that’s a 50% increase in “enjoyment money” or savings.
Canteen lunch at work is £4:95, which I bought 98% of the time. A tin of perfectly acceptable chicken curry and a microwaveable rice is £2:35, that’s £2:60/day saved, which over a working year (227 days) is getting on for £600. I don't eat it anything like every day obviously… I used to have a cup of coffee from the onsite Costa every day too, that was £1:70/day, so that’s another £380+. A £1k a year saved out of taxed income, that’s nearly £1300-ish on salary.
This doesn’t include changing your phone contract, Sky, Prime, drinking once a week instead of twice, unused gym memberships, magazine subs, the list is endless.
As others, I run a spreadsheet as to where it all goes, and Tesco/Asda is a standout item, but I need to eat (maybe not as much!) so anything that can reduce this bill is watched.
A mate gets a big take away every single Friday night for a family of 3, they aren’t exactly flush, but he doesn’t get change out of £35!. £1800 p.a. on food which isn’t that great anyway. Cottage pie and an Aldi bottle of red would cost a tenner.
If you take away the unavoidable, like gas, electricity, water, rates, petrol, rent/mortgage etc… etc… the amount of money actually left for “spends” for many people may be only £3K p.a.. add a £1-2K on to that from above, and that’s a 50% increase in “enjoyment money” or savings.
Robertj21a said:
Of course , the deposit on your first house is a lot less if you buy away from the higher priced areas !
For many who have a good income, but struggle to find a sizeable deposit, it may be better to move further out and commute in.
What is the financial cost of a commute? This is usually ££££ per year which can be better spent on your mortgage than on Southern Rail, Thameslink, LNER, TFL etc. Then there is the time cost. Over time these sometimes don’t stack up. Obviously living in (insert posh part of London here) is not the example of spending more.For many who have a good income, but struggle to find a sizeable deposit, it may be better to move further out and commute in.
Also with costs, even the tinned chicken curry and microwave rice example can be cut back too, my strategy is to cook extra for dinner the night before and take some for lunch the next day. Microwave rice is crazy expensive compared to my 10kg bags from the world food section of most supermarkets.
Biggest cost savings I have found is to shop online for delivery with vouchers that they send (£10 off £60 etc) and stick to your recipes for the week. Cook fresh, either daily or batch and freeze/ reheat and avoid impulse purchases. Don’t avoid cooking ‘nice’ things, buy nice food...eat steak if that’s what you like... it’s a damn site cheaper than takeaway and or eating out. When you cook a lot and hone your recipes you will find most takeaway and restaurant meals to be frankly poor.
Sitting around like a miser eating beans and rice is not a good life for anybody, strike a balance and improve your net position.
dodsi2000 said:
But there is a middle ground, running an old car does not always mean cheaper than a bargain basement lease. But that is certainly not a BMW 140M on a Lease something much less PH can be had for £2k/year to include maintenance and road fund licence and breakdown cover. In reality I would challenge total costs against a 12 year old BMW taking into account when you bought it, what was paid, depreciation, road fund, breakdown cover, mpg differences, servicing, consumables etc etc I doubt the costs are /that/ different.
Hey, I agree that my 330i Coupe is probably not as cheap as a current cheap lease annually. But it is cheaper than a M140i. Thankfully I don't need the cheapest solution, as I save monthly for cars, holidays and unexpected bills. My point is the misunderstanding that I need to spend up to my monthly salary each month to get the best I can possibly afford. It leaves no provision for anything or the future. I was trying to understand the mentality.... evidently unsuccessfully. I also admitted I was more frivelous when younger, so it is not only a generational thing but an age thing too.(Please don't look in my garage, as you'll find too many cars to justify my transport needs but I can easily afford their upkeep and if not, I have a spare or two
)red_slr said:
I think its about convenience with the current "younger" generation. They, IME, see for example £900 a month rent as just normal and they can give notice any time and a month later they are out. All their friends pay the same so its just "normal".
They see a 25 year mortgage at £750 a month for the same property as a life sentence and I think by 35 most realise perhaps renting was not the best idea as along term solution. Mortgages are as cheap as they are ever going to be. When I was in my early 20s my mortgage was 50% of my take home. Most of that was interest. I still had to put down a 10% deposit. My income was significantly lower than what it would be today too. Mortgages today are about half the cost of what I was paying, on a lower income.
That's simply wrong. Young people want to buy, but many cannot, as house price growth has outstripped wage growth and large deposits are very difficult to save for. We need 60k up front for our first property.They see a 25 year mortgage at £750 a month for the same property as a life sentence and I think by 35 most realise perhaps renting was not the best idea as along term solution. Mortgages are as cheap as they are ever going to be. When I was in my early 20s my mortgage was 50% of my take home. Most of that was interest. I still had to put down a 10% deposit. My income was significantly lower than what it would be today too. Mortgages today are about half the cost of what I was paying, on a lower income.
Bussolini said:
red_slr said:
I think its about convenience with the current "younger" generation. They, IME, see for example £900 a month rent as just normal and they can give notice any time and a month later they are out. All their friends pay the same so its just "normal".
They see a 25 year mortgage at £750 a month for the same property as a life sentence and I think by 35 most realise perhaps renting was not the best idea as along term solution. Mortgages are as cheap as they are ever going to be. When I was in my early 20s my mortgage was 50% of my take home. Most of that was interest. I still had to put down a 10% deposit. My income was significantly lower than what it would be today too. Mortgages today are about half the cost of what I was paying, on a lower income.
That's simply wrong. Young people want to buy, but many cannot, as house price growth has outstripped wage growth and large deposits are very difficult to save for. We need 60k up front for our first property.They see a 25 year mortgage at £750 a month for the same property as a life sentence and I think by 35 most realise perhaps renting was not the best idea as along term solution. Mortgages are as cheap as they are ever going to be. When I was in my early 20s my mortgage was 50% of my take home. Most of that was interest. I still had to put down a 10% deposit. My income was significantly lower than what it would be today too. Mortgages today are about half the cost of what I was paying, on a lower income.
dodsi2000 said:
Robertj21a said:
Of course , the deposit on your first house is a lot less if you buy away from the higher priced areas !
For many who have a good income, but struggle to find a sizeable deposit, it may be better to move further out and commute in.
What is the financial cost of a commute? This is usually ££££ per year which can be better spent on your mortgage than on Southern Rail, Thameslink, LNER, TFL etc. Then there is the time cost. Over time these sometimes don’t stack up. Obviously living in (insert posh part of London here) is not the example of spending more.For many who have a good income, but struggle to find a sizeable deposit, it may be better to move further out and commute in.
Also with costs, even the tinned chicken curry and microwave rice example can be cut back too, my strategy is to cook extra for dinner the night before and take some for lunch the next day. Microwave rice is crazy expensive compared to my 10kg bags from the world food section of most supermarkets.
Biggest cost savings I have found is to shop online for delivery with vouchers that they send (£10 off £60 etc) and stick to your recipes for the week. Cook fresh, either daily or batch and freeze/ reheat and avoid impulse purchases. Don’t avoid cooking ‘nice’ things, buy nice food...eat steak if that’s what you like... it’s a damn site cheaper than takeaway and or eating out. When you cook a lot and hone your recipes you will find most takeaway and restaurant meals to be frankly poor.
Sitting around like a miser eating beans and rice is not a good life for anybody, strike a balance and improve your net position.
Bussolini said:
London, but when I was in Edinburgh I would have been looking at 30-40k+.
London - The introduction of the LISA helps, massively. Even more so, utilising a S&S LISA to hopefully build it up faster (depending on how risk averse you are).Admittedly, buying a home as an individual is obviously more difficult than buying with a partner/friend...
That's what gets me with peers in my local area, house prices are shockingly cheap, some terraces are even £40k... How, as a couple in full-time employment, even earning the minimum wage, can you not jointly afford a £2k deposit for a house like this?
Bussolini said:
red_slr said:
Where are you in the UK?
London, but when I was in Edinburgh I would have been looking at 30-40k+. I think you are comparing literally the two worst locations possible where property prices are concerned.
Really interesting to see the generational differences here. My parents were hard on the belief that 'if you can't pay cash for it up front, you can't afford it'. This has rubbed off on me but i'm still 26.I see all of my mates driving around in flash cars which i know cost them £400 - £500 a month in payments whilst on middling salaries.
Jealousy is not a thing i experience but i do always wonder if i should join the status quo with the 'Pay monthly crew'. A close friend bought a ~£25k car on a salary of not much more and i question who has the right mentality. I can only hope my way works better long term.
Jealousy is not a thing i experience but i do always wonder if i should join the status quo with the 'Pay monthly crew'. A close friend bought a ~£25k car on a salary of not much more and i question who has the right mentality. I can only hope my way works better long term.
Lukas239 said:
Really interesting to see the generational differences here. My parents were hard on the belief that 'if you can't pay cash for it up front, you can't afford it'. This has rubbed off on me but i'm still 26.I see all of my mates driving around in flash cars which i know cost them £400 - £500 a month in payments whilst on middling salaries.
Jealousy is not a thing i experience but i do always wonder if i should join the status quo with the 'Pay monthly crew'. A close friend bought a ~£25k car on a salary of not much more and i question who has the right mentality. I can only hope my way works better long term.
It depends how you do it. If you use the £400 to pay £100 toward a car repair/replacement fund every month, and £300 to savings or pension or mortgage overpayments (whichever is most useful to you), long term you should prevail. Jealousy is not a thing i experience but i do always wonder if i should join the status quo with the 'Pay monthly crew'. A close friend bought a ~£25k car on a salary of not much more and i question who has the right mentality. I can only hope my way works better long term.
designforlife said:
Paid spotify is a complete waste of money if it's tight, live with the ads and pocket that tenner a month.
If you are living in your overdraft then you need to take fairly drastic action to climb out of that for starters.
If you are living in your overdraft then you need to take fairly drastic action to climb out of that for starters.
I am puzzled about this paid for service.
What are the advantages/benefits of Spotify at (is it) £120 annually? I really don't know.
I presume the completely free alternative, is a couple of clicks to download each of your favourite recordings (without adverts), then listen to your library of chosen songs, on any device you wish, at any time.
Convince me that I should pay for the Spotify service, because I thought I already had almost unlimited music.
How are there people here suggesting they needed a £40k deposit for their first home?
There are 5% mortgages out there, so youre either a very very high earner or you are trying to buy far too much property.
Its a first home FFS its not meant to be glamorous.
I type this from the lounge of my first home. Its a small 1 bed flat, with 3 rooms which had no heating when i first moved in.
Ive now had a year and 5 months of paying off my mortgage rather than someone elses. Maybe in two years time I can look to move on to somewhere bigger.
Expectations is the key to the lack of affordability.
Everyone wants their first home to be like the home they grew up in.
Compounded by everyone renting a big place like the one they grew up in, and then wondering why they have no money each money to save for a deposit.
If you cant set aside £200 per month on a salary of £20k, then you are spending too much its that simple.
There are 5% mortgages out there, so youre either a very very high earner or you are trying to buy far too much property.
Its a first home FFS its not meant to be glamorous.
I type this from the lounge of my first home. Its a small 1 bed flat, with 3 rooms which had no heating when i first moved in.
Ive now had a year and 5 months of paying off my mortgage rather than someone elses. Maybe in two years time I can look to move on to somewhere bigger.
Expectations is the key to the lack of affordability.
Everyone wants their first home to be like the home they grew up in.
Compounded by everyone renting a big place like the one they grew up in, and then wondering why they have no money each money to save for a deposit.
If you cant set aside £200 per month on a salary of £20k, then you are spending too much its that simple.
Benbay001 said:
How are there people here suggesting they needed a £40k deposit for their first home?
There are 5% mortgages out there, so you're either a very very high earner or you are trying to buy far too much property.
Its a first home ... its not meant to be glamorous.
There are 5% mortgages out there, so you're either a very very high earner or you are trying to buy far too much property.
Its a first home ... its not meant to be glamorous.
It is because you are perhaps lucky not to live in the Weybridge area. Take a look at first home prices.
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