What financial advice would you give to someone who's living alone for the first time?

[uninvitedcat]

I'm going to be moving out from my parent's home in about 2 months and would appreciate any general advice . I've never had to budget before and it's a little overwhelming.

On a more specific note if anyone has the knowledge to answer - what's the best thing to do with savings? Stocks etc seem risky, but then 1 or 2% return on savings accounts seems worthless.

@LadyJaye it is but I only actually started doing it a year ago when I was fed up of us never having as much in our savings as we expected. We noticed that we'd buy the odd piece of clothing, couple of books or unplanned meal out in the last week of each month and it was because we were seeing our balance as 'free' money instead of intended savings.
Now we save on average £100-200 per month more than we did a year ago.

Also we never realised until a few years ago that you could spread council tax over 12 months so because we are used to the cost , we put the Feb and March amount into savings (on 1st of the month ), and that pays for 3 or 4 theme park/zoo type days out in the summer holidays that normally we'd never normally consider.

Definitely hadn't thought of some of these things (like budgeting for cleaning products) so again, thank you all! Sounds like a good idea to add to savings at the start of the month too. I do have some money saved to cover an emergency, but it's not in an actual savings account IYSWIM.

@chestnutmares yes, I was planning for whatever's leftover after the necessary costs + savings to be a general disposable income budget as I can't really see a reason to budget for each of them individually.

@LadyJaye any tips on a specific long terms saving account to use?

Other folk have mentioned most stuff but I don't think anyone has mentioned insurance. Contents and bike. Shop around for it, and everything else.

Starting out, it can be handy to put your spending money onto a pre paid card. No overdraft. No risk of spending what you don't have. If you use Monzo (I think it is) the app will give you good breakdown of where your spending goes. Put your savings aside the day you get paid.

I know you're going to say "I can't afford it", but if you possibly can, consider putting just a wee bit more into your pension after you've done your emergency money. Money you save at the start of your career is the most valuable - it has longer to grow.

I'm the Queen of mental accounting so I have about eight different savings accounts (they're basically online jam jars) - one for holidays, one for rainy days, one for house repairs, one for the car, one for the bucket list, one for my funeral, one for clothes, one for the tax man, and one for the kitchen. I find it easier to know where I am when it's not all in one place (and I've managed to "lose" the logins for some of them so I can't get the money out).

Just before seeing this post I had just said to my millennial DD that the one piece of advice I wish I'd been given sooner is to track spending and set a budget.
We have been using YNAB for the last 7 years and it's been revolutionary.
It honestly would have changed our lives if we'd started sooner.
Also, follow MSE for advice and save up to put 3-6 months easy-access rainy day money away when you can and pay into a pension at least up to the amount your employer matches - you immediately make 100% and the tax advantages are huge.

@Rainbowshine

Another thing that you need to budget for (which you might have included in your food costs but it’s not clear) is cleaning equipment and cleaning products. A friend recently moved (split from partner) and suddenly realised how expensive it was to get basic kit like bucket and mop, dustpan and brush etc.

huh? Did she not clean when she was with her partner then? Why would the cost of every day items come as such a surprise? Was she also surprised at the cost of loo roll or milk? Besides which, those things are far from expensive...a basic bucket/dustpan and brush cost less than two quid each from somewhere like home bargains, mop a fiver, add some 99p disinfectant or 39p bleach and sorted . If you'd said cleaning items like a hoover/iron etc which could be more expensive outlays it might have made more sense but those are weird examples!

OP - lots of people have already suggested monthly budgets and logging all spending, but don't just do this for a few months and assume you're sorted - e.g. electric and gas could more than double in the winter compared to summer. For lots of things it's cheaper to pay upfront for the year (car/home/contents insurance, road tax, public transport ticket) etc. but make sure you also

Use a 'cashback' website for all the bills and purchases you can and swap insurance, gas and electric, etc, every year - I usually spend say £120 on h&c ins for a year and get at least £30 back via cashback. Same with switching bank accounts for the best introductory offers every so often.

Swap introductory offers for things like hello fresh, simply cook, uber, etc between a group of friends and make use of free trials for, e.g. prime, spotify, etc.

If you've got a stable job and need to make a big purchase (e.g. a sofa) it actually works out cheaper because of inflation to pay for something on 0% credit instalments than upfront.

Get all the store cards you can, clubcard, nectar, boots advantage etc. Even if you don't use them often they can add up. Often they link to other things, e.g. I rarely shop in sainsburies but earn loads of nectar points from ebay. Save them on an app on your phone rather than carrying them all round with you.

For the winter, buy an electric blanket or small heater and sit in one room with them on and a hot water bottle so you are still warm but not spending ££££ heating rooms nobody is in. Leave the oven door open after you've cooked food to warm the kitchen for free.

Have fun!

Try and work out what you can save, first get 3 months living expenses in case you lose your job etc, then divide savings into 2, 1 long term house deposit car pension etc you could use a LISA or a stocks and shares ISA, second for holidays extra presents beautiful boots etc this will probably be some sort of instant access saver you will do well to get more than 0.5%
Unless you are sure your job is very temporary sign up to the pension scheme

If you are renting you will need household insurance. Try and save a little bit of rainy day money and something for treats/holidays as everyone needs some joy.

@thevassal my friend has come from living with a very high earning partner who paid for everything on credit card and paid it off each month, so they never needed to budget or even look at the cost of everyday things, to living on minimum wage (she hasn’t worked for the ten years she was with him, he was very controlling and abusive). So on her budget yes even a few pounds in B&M or whatever is a hit on her tight budget and she’s adjusting to a very different lifestyle and spending habits. Please consider that not everyone has the same experience as you when you post your comments as it came across rather rudely.

But your post doesn't make sense because those things aren't expensive. The only way it would make sense would be if she honestly thought that a bucket would cost about 5p, which no fully functioning adult would do, no matter how rich her ex partner was.

If you'd said "she is surprised at how much there is to buy on a small budget and how quickly it gets spent on things you wouldn't even consider" that would make perfect sense, but you didn't, you said she was surprised at how expensive they were. But even when I was on the bones of my arse I wouldnt think a bucket costing £1 was expensive, even if it was something I couldn't afford to spend at that time.

It's the difference between saying "you might be surprised at how much basics like milk and bread you go through" (good advice)

Compared with "watch out for milk it is insanely expensive at more than a pound for 4 litres my friend hadn't bought milk for twenty years and couldn't believe how expensive it was" (irrelevant and inaccurate advice to 99% of the population who know how much milk costs!)