Where does your income go?

[Jossman]

gazza5 said:

Congrats on the house.

etc

Thank you

We've gone towards the lower end of the spectrum in home ownership - a 1 Bed detatched Bungalow at sub £250k since a house where we both grew up is minimum 400+k. Still a stinger though!

Shnozz said:

Since when is a TV licence £35 PCM?

etc

I know right?

You're right about it being sobering when you finally write it all down and/or have a proper discussion. Strange how we can look past such expenditures so easily.

Shnozz said:

And OP, whats with the £15PCM phone and £45PCM phone? Presumably the former is a good value contract? I appreciate you are tied now but whilst I am not one of these sad s with a 2006 nokia, I buy the last edition iphones via online retailers for no more than about £250 a pop with a warranty. Run fine on the latest iOS. If I need to change I usually see £150 back on resale. If I drop one I get £100 back for it with a smashed screen so the cost to change is never more than about £150.

I bought an iPhone 7+ 256gb as I do lots of work stuff (I'm a designer, lots of drawings to look at on email etc) at release, RRP was around £1,000 but all contracts were £80+ pcm with a £100 initial cost. GiffGaff offered the phone for £45pcm for 2 years unlocked, so did that and got a 1 month rolling sim for £15pcm everything unlimited, made sense at the time. Hence the phone is paid for in 2 months time so just the rolling simcard to pay from then on.

Jakg said:

Your estimates for "remaining money" are distorted by the fact you've missed out a lot of outgoings.

Ignoring "house" ones you've put £300 for, things like:
Car running costs - servicing, repairs, consumables etc
Dentist
Hair cuts
Clothes (I don't mean in the typical fun sense - I mean the fact that things like shoes wear and will need replacing)
Eye tests

Some of these are small, but cumulatively...

Yes, you are right in what you're saying. That's kind of what bothers me, as a few posts above it only takes 1 bill and you're back to square 1.

I've left those things out because they're not a regular PCM outgoing, and I wanted to simplify the post a little.

But for reference, the car is what it is really, consumables tend to end up being upgrades or changes :,)
Don't pay for my hair cuts.
Dentist/Eye Tests go on my health insurance through work so no money changes hands apart from through the company card.
Haven't bought a piece of clothing so far in 2018 and no pairs of shoes since Christmas 2017 so I guess I'm due some very soon!

Thanks everyone for your replies, interesting to hear other peoples perspectives.

[Jossman]

romeogolf said:

This makes a very refreshing change from other posts here where posters try and hide figures and post in vague references - often in the process leaving us all to assume they're vastly better or worse off than the reality and thus leading to skewed advice. So, OP, thank you for being transparent. This could be a good thread for that worthwhile advice and for those who aren't the PH stereotype to feel a bit more normal!

Thanks for the kind words, and thanks for your equal transparency! Interesting to see what in that list can easily be forgotten/overlooked when you're thinking of budget and considering adding another outgoing. I'd have forgotten the majority of those outgoings if I'd have been thinking on the fly.

[Jossman]

Thanks everyone for their replies, some really interesting scenarios being illustrated. Everyone seems relatively in control though so that's a good thing to see.

Any goals? Debt clearing, savings targets, mortgage overpayment targets? I think it's healthy to have targets so I'm going to try and create some for myself as I mentioned in the OP, clearing debt will be target #1.

[Jossman]

roadsmash said:

Agree with most other comments. My two pence would be to be patient, OP.

I was earning the same amount at 23, always longed for more money. Now I’m still in my 20s earning a lot more.

I put it down to ambition and loyalty to a good company (pay rises, commission etc).

If an imminent pay rise is unlikely, you’re still in a strong position, although your debt is your weak link. Keep over paying the debt to get rid of it ASAP and suddenly you have so much more left over each month once it’s gone.

Once this is done, begin to stack the cash and start to pay off things annually, such as your TV license and car insurance, this frees up your monthly available funds for a whole year.

Last note is that I see your mortgage payment seems in the higher bracket for a 23yo, have you gone for the biggest mortgage possible? It seems all FA’s and brokers nowadays try to put young buyers on the biggest possible mortgages based on their affordability.

With brexit on the horizon and interest rates only going up, you may want to review this mortgage, and possibly downsize. It seems extreme, but I anticipate some big increases in mortgage rates in the next few years. Leaving those with big mortgages in a scary position.

Equity equity equity!

Edited by roadsmash on Monday 24th September 08:01

We're in the SE so our £220k mortgage was the smallest we could go for and bought us one of the cheapest properties - a 1 bedroom bungalow in the cheapest area we could find which was still commutable to work at reasonable cost!

We could have borrowed another 40k roughly, but wouldn't have bought us anything better than what we have now.

Simpo Two said:

Still interested to know how a £150.50pa TV licence costs £35pcm.

Typo, checked and its £25 pcm over 6 months.

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.

STUFF

-Wisdom

Thanks - You, along with many, are offering very useful advice and I'm planning on doing exactly that - plow plenty of income into my pension and try to make the most of the early start.



Didn't look at this thread over the weekend but it's providing some interesting discussion! Thought provoking, certainly.

Thanks everyone.

[Jossman]

S9JTO said:

That's something I've strived to avoid, you might call me shallow but I don't ever want to downgrade my cars. The LISA helps with the seperation of funds.

Good to know you got back into something interesting soon after though!

Interestingly, I bought my R34 just under three years ago with the intention of selling it to release funds for my house deposit, when I brought up the plan to sell it around 6 months ago it was met with Fire and Fury from the Mrs. Turns out she's sentimental as that's the car I took her out on our first date on, went on Euro trips and UK road trips in, etc etc. Who knew..

Great on the one hand as I keep my toy, but jeez that cash would be handy!

[Jossman]

S9JTO said:

Hopefully it’ll be a keeper then! Even better if it’s an R34 GTR as they’ve appreciated at an astronomical rate and I can only envisage they’ll continue to do so

My girlfriend has said she’s happy with me keeping/upgrading my cars before/after an inevitable house purchase in the next couple of years so I’m happy with that haha!

It's not a GTR unfortunately - I'm no high roller and I use it for drifting so wanted a RWD - it's still appreciated to 3x what I paid for it in Japan though so I'm almost riding a similar wave!

Does make it easier to keep though because of the 'it'll be worth more next year' mentality!