How would you budget £30k grad scheme salary (no kids,rent)

[levanti]

In September I started my first year of a 2-year grad scheme. Luckily my first two rotations are in a commutable distance from my family home. My parents don't believe in charging rent but I contribute by paying for weekly shops, meals out, treating mum etc.

Despite hardly having any bills I don't really have any savings, my philosophy, for now, is that after having to scrimp and scrape for the past 3-4 years I just want to enjoy myself a bit.

AIBU to ask how you would manage your finances/do things differently if you were at the start of your career again. I can't help but feel a bit wasteful and guilty. At the end of the month I don't really have anything to show for myself.

Thanks for the input! Will definitely be looking to open a savings account that I can't access. Will aim to put away £1000. Getting on the property ladder wasn't on my radar as I was waiting for siblings to finish university and go in it together, but getting a jump start won't hurt.

I've definitely made it harder for myself by overindulging for the last few months. Have no idea how my friends/colleagues can go out every night and still save

Tartanwarrior Thank you, , my parents have always been incredible to me!

It's been great to hear from everyone, when my parents were encouraging me to save I thought they were just being a bit ott/overbearing.

Have no idea how my friends/colleagues can go out every night and still save

They either earn more than you, don't spend as much as you think, aren't actually saving and/or are in debt, have other sources of income eg money from parents or an inheritance or a combination of any of the above.

I was waiting for siblings to finish university and go in it together

If you can afford to save and get a deposit for your own house, why would you want to live with siblings?

30k is loads, you're so lucky 😀 I've got a new job, starting salary is 22,500 and that's amazing money for me.

In terms of what to do - save, save and save. I wasted mine away for the past 3years and really regret it now. You've not got to put a deposit down or own a flat or house - if you're planning on moving around a bit doing that wouldn't be ideal anyway. But on 30k you could move out and rent your own flat. I'm not sure how old you are of how you feel about it (I can't wait to leave home, friends of mine love it) but for me I miss the independence of living away from home and can't wait for that.

I've been earning a decent wage the past few years, from minimum wage to 19,500. I was daft and spent it on meals out, nights out, treating myself. Which is all well and good but when I suddenly got offered a job across the country it's been a scramble to save and only just possible

I'd make a budget and stick to it. Things like bills, travel, food, come first. Put at least 300 per month into savings if not more. Then give yourself an extra allowance for coffees on way to work, nights out, luxury's, clothes etc. I allow myself 30 a week. I'm not enjoying it like I was before but I'm saving and I hope that in 5 to 10 years I'll be earning more so can treat myself more

Definitely save more than you spend. In a few years time when you have more financial responsibilities you’ll be glad of it but do treat yourself on the kinds of things that’ll be harder to have one day - ie weekends away, nice annual holiday etc. Worth more than a new pair of shoes etc.

Don't adjust your spending. You simply won't do it.

Set up a direct debit into a savings plan that you can't get at, set it up the day after payday.

And pay your parents!!

Be careful not to piss it up the wall - your parents could begin to resent you taking advantage of no rent and yet you are flashing the cash and not saving, £500 pm out of that salary with V little other outgoings is quite small Imo.

So you are looking at about £1900 after tax, NI, 4% pension and student loan.

£333 into a LISA each month (Skipton do one) as if you save that each year it's £4k and the government gives you £1k. You can only use this for a 1st house purchase up to £450k or for your pension - if you access it before you will pay penalties. I wish I'd started doing this earlier. Standing order on pay day.

Then accessibly savings - for holidays, but also for bigger purchases e.g. deposit for a flat. Any high street ISA is much of a muchness interest rate wise. Suggest £300-400 a month, but also put a sweep on your account to take anything on the day before payday into your savings. Standing order on pay day.

I'd also up your pension to whatever your grad scheme match as a minimum. So if they offer 5% contributions, you should put in 5% too. You should put in more - it would be wise but I understand you don't want to go into full on savings mode right now. Cumulative interest goes along way though, and your next job pension might not be as good.

So you've still got about £1000 left over. Depending on where you are, you could be looking at £400-800 rent for a room, plus bills (council tax, broadband, water, gas/elec) of about £100 contribution (shared house). Until you move out I would consider putting what you would pay on rent (or at least 50% of it) into a specific savings account for rent and deposit. Standing order on pay day.

Travel could be free or it could be a car - can't estimate.

Fun money - important as it keeps you going. I give myself £50 to buy any coffees or meals out, going out, hair cuts, clothes etc. £200 a month to spend how I like. If you're going out regularly, this won't go far. I choose my social life a bit more sparingly now e.g. I'd rather go for one really nice meal to a restaurant I've been wanting to go, than lots of cheaper pub lunches or things. You could make it easy on yourself, transfer this to a Monzo card away from your main salary account and then a) you don't spend more than you think and b) you can easily see how quickly and where your money goes.

Food - make your own lunches so your fun money goes further. Don't buy coffees out - get a keep cup, buy yourself a french press and enjoy better coffee for less.

Reconsider expenses such as gyms, high cost phone contracts etc - it's much cheaper on your income to buy a phone outright and then pay a £10 a month deal.

Once you have your standing orders in place, it's so much easier because you know what you have left.

So thats:

• a LISA
• an instant access savings for holidays
• an instant access savings for rent/future deposit
• a monzo card for fun spending money

Before I went into full savings mode, I wasted my money on picking up bar tabs, being very generous and paying restaurant bills, eating lots of (in hindsight) mediocre meals out, and not planning in advance for big purchases eg holidays just made them so much more pricey. Since being more aware I've gone on trips all over the world, and I've got about 70% of the way towards a sizeable house deposit. I much prefer living this way.

I think in the next few months I will adjust my spending in order to save £500 each month which seems very doable.

As another poster said, you have this the wrong way around. (Although it may just be the way you phrased it, rather than your plan that is at fault.) The recommended way to do things is to transfer an amount to savings first (possibly using a direct debit) then decide how you're going to spend the rest.

Savings shouldn't be what's left over when the spending is done, spending should be how money is deployed after saving is taken care of.

If you google the phrase "pay yourself first" you will find this is a concept that's been around in (american) personal finance books for a long time.

Put a decent amount into your pension - compound interest and all that.

I would be looking to save £1K a month. If you think you might want to buy a property look into the help to buy isa. Don’t put all your cash into ISA though as rates are terrible and the tax rules on savings have been relaxed.

put a sweep on your account to take anything on the day before payday into your savings how do you do this?

Get a Monzo account, sounds like it would suit you. It categorizes your spends for you and you can put money into "lockable pots". You can also set up programs to save increasing pennies every day eg. 1p on Jan 1st, 2p on Jan 2nd etc so you don't feel the pinch as much (until later in the year at least).

Pay into company pension, pay into share scheme at work, save some for yourself into ISA or look money saving expert for best places to save. You are in a very fortunate position, make the most of it

Faz - I bank with firstdirect and you can set up a sweep by clicking on payments. I know Lloyd’s and other banks do it too. You then fill in details of the sweep rule and what day it should happen based on your payday.

I would have a month off so you feel like you're celebrating!
Then I absolutely would save £1000 a month. If you don't trust yourself could you get your parents to look after it?
£1000 is plenty to live off at a good standard

That's great I bank with them too. Thanks minddisco

I can imagine it's easy to blow 1900 tbh. If you are going out three times a week, out out, that could be 1000 a month. 300 on clothes and shoes, 200 on food...

300 on clothes and shoes, 200 on food...

Perhaps for an occasional month, but that sort of spending each month for just one person would be excessive.

Save as much as you can to get on the housing ladder. Look at how much you are hoping to earn after you finish the scheme, multiple it by 3 and then subtract it from the plums of place you want to buy (check out right move), then divide that by the rest of the time in the scheme and save that each month.

Perhaps for an occasional month, but that sort of spending each month for just one person would be excessive i know its what i did years ago pre kids but i can see how a young person with no commitments could burn through it.

You are currently richer than you will ever be again, once you move out you'll have all your living expenses to cover and it will be very hard when you are used to frittering it all away.

Don't 'try' to save £1000 a month, do it. Maximum pension contributions and maximum into a LISA every month and the rest into normal ISAs (we split half and half S&S and cash).

We have an income of £100K pa but you are frittering away more per month than we spend on clothes and gifts and days out for a family of 5 and we really don't live frugally.

tbh saving £1000 pm is rather pathetically small given that your entire income is effectively disposable. Even quite comfortably off people often only have a few hundred pounds left over after essentials each month.

If you only save £1000 you are still giving yourself over £900 to fritter away on nonessentials. If you get used to that lifestyle you are setting yourself up for future misery because you haven't managed your expectations and you will now see a pretty luxury lifestyle as the basic minimum. Your earnings will need to be about £15k per year higher than someone with more reasonable expectations, just to feel the same level of satisfaction as them.

Up the savings to at least £1400pm. Don't "try" - set up the standing order to go out of your current account the day after pay day. If you aren't regularly saying to friends "no I can't afford it" then you aren't saving hard enough.