Please help me work out my budget - inspired by other thread

[TherapieTaxi]

Inspired by today’s other budget thread!

I live in a house-share in London and take home £1700 per month.

Current monthly bills/expenses:

Rent and bills: £690
Transport costs: £135 (monthly Oystercard)
Food: £120

Phone bill: £21
Spotify: £9.99
Union membership: £15
Health (opticians, dentist etc.): £15
Work gym membership: £4

Holidays: £105
Birthday/Christmas presents: £42
Treats: £173
Hobbies: £130
TV licence: Average of £12 per month

Savings: £225

Do you think there’s anywhere where I could cut back/make savings?

Just looking for advice in case there are any money-savings tips/tricks.

Thanks!

Your spending £173 on "treats"- can they be cut back?

Yeah, I mean the treats and hobbies would be an obvious place to start. What does that money go towards?

Can you be more specific about "treats"?

£120 for a single adult seems like a lot for shopping but I dont know if prices are higher in London.

You could probably save money on your phone bill depending what sort of package you need. By getting a sim only when your contract runs out, rather than getting a new phone, you can save a lot. I pay £10pm.

I think treats needs to be broken down a bit more, it's the biggest place to make an easy saving, and £173 is a v strange number!
Also Spotify, could you listen to some adverts and save £10/month?

Other than that, what are you saving for? If short term, could you cut out holidays until your target it met? Alternatively if long term, could the holiday budget be reduced?

£300 for treats and hobbies? Hobbies ARE treats!

Thanks all!

I agree £173 is a bit of a random number to settle on 😂 I decided on it as it was what I came up with after I allocated money for rent, travel and food.

Unfortunately I can’t change my phone contract at the moment as just got this most recent £21 one last month and I have to stay in it for a year. I’ll change when the year is up though.

The hobbies are music lessons and language lessons - I didn’t want them to be part of my treats budget as they’re not really connected. The ‘treats’ works out to around £43 a week, so enough for 2 meals out or something like that - or a meal out and a few cheap-ish work lunches.

I wouldn’t say £120 per month is that much to spend on food - it’s £30 per week. I’ve just got a Hello Fresh subscription - might cancel it depending on how it goes - for around £30 a week, so that’ll go into my £120 food budget.

It’s all relative but random thoughts are:

Any reason you’ve settled on London? That’s quite a low take home pay for London! Could you relocate somewhere you could have your own studio for a lower cost than that?

Are you taking advantage of any company pension match?

Hobbies and treats - do you get £300 worth of value out of these every month? That’s three times as much as you spend on travel. Do you value these shorter term fun spends three times more? There isn’t really a right and wrong, it’s about spending in line with your values.

I think you could probably trim the grocery spend if a fair amount of your treats is going to eating out/lunches, but I know not everyone has freezer space/access to Lidl etc.

I think your savings rate is quite impressive for your take home pay to be honest!

In terms of my goals, I just want to try and save enough so I can put the maximum away each year in a Lifetime ISA (currently £4,000). I saved quite a bit at the start of the year so don’t need to save as much now, and want to use this LISA money towards a house deposit and then for retirement. Also want to save a bit extra each year for an ISA to open each year.

Hi Poo - thanks for your post.

I work in the public sector so have pretty good pension benefits atm. Because of this (and because I enjoy the work in my organisation), I’d like to stay in the public sector for the foreseeable future. I am looking for higher-paying jobs at the moment though.

If I need new clothes/shoes etc, that’ll come out of my treats spend.

I don’t really have much freezer/cupboard space either unfortunately. But I prefer to bring in lunches from home and eat out a couple of times a week rather than always buy lunches at work.

You sound very sensible OP and I too am impressed that you save so much from a relatively low take home pay.

Aww thanks Barchester! :)

I think you're doing well spending 120 / month on groceries! If you increased that a bit to cover making more work lunches, you should find you save overall. Have you included things like broadband, contents insurance etc? Do you run a car? If not, do you spend on cabs at all? Does the monthly amount set aside for gifts include a proportion planning towards Christmas?

The £120 per month on holidays - is this a split of predicted annual costs, so you're planning to spend over a thousand per year on holidays? If that really means the £120 each month is "saving for travel because it's important to me" then fair enough. It's a lot more than we would budget, but this has to be a budget plan that fits your life and your priorities.

Do you have any credit card debt or loans? If you don't and you're able to split all your income into the budget above, I don't see why it's unreasonable as long as you have a safety net in case of illness or redundancy (I'm aware public sector means you should be quite well covered in both those scenarios).

Thanks for your post, Flathead :)

I do make lunches to take into work most days, and might buy lunch around once a week.

Things like my broadband and contents insurance is covered in my rent. Part of my presents spend goes towards planning for Christmas, yes. I don’t have a car, so just spend money on public transport, and don’t have any debts apart from student loan (which comes out of my monthly salary before I get my take-home pay).

In terms of a safety net, I’ve got a ‘rainy day fund’ where I’ve saved almost 2 months’ worth of main expenses. I save around £100 into that every month and will use that to fund repairs when I buy a house and/or to tide me over if I get made redundant. If I need to take money out of it, I’ll make sure to add to it too.

Surely AIBU isn't the place for this and you'd be better off on Moneysavingexpert or something? They have a dedicated forum for things like this and have a template to use.

e.g. you have nothing for clothes/haircuts/etc. Your bills need to be broken down into electric/gas/insurance etc.

slash money for new clothes/haircuts comes out of my treats fund and my bills are all included in my rent.

I feel like I am doing ok and then I read that £1700 is low take home pay! Jesus. I think you're doing well OP? You could cut back on hobbies but then you wouldn't be doing things you enjoy - life is for living not just existing x

I’ve just got a Hello Fresh subscription - might cancel it depending on how it goes - for around £30 a week, so that’ll go into my £120 food budget.

That is your food budget in its entirety. That’s not a cost efficient way to buy food.

LittleBear I agree - I’m just trying it out for a week though. I’ll see how it goes, and if I like it I’ll make adjustments to other areas of my budget to afford it.

HelloFresh is SOOOO expensive, that is the opposite of cost-effective haha

I think you are doing really well. You could definitely cut down on the treats though. Eating out twice a week sounds widely extravagant to me, but perhaps you have a great social life and it’s not easy to invite friends to your home. I would ditch the food box too. It will be much more expensive than buying your own carrots!

Sorry but 1700 for London isn't really a low wage. Especially as op mentioned a pension. @PooWillyBumBum who do you know in London? There's plenty people on way less.

Fellow Londoner here! Can you cycle? Before I got a job while is basically working from home all the time I cycled to work and back. From my first flat is was a four mile round trip, then I bought somewhere a little further out and that was eight miles each way. Saved on gym membership too!

Would also recommend keeping an eye out for soft launches (when restaurants first open often it's 50% off food) for your nights out, makes it so cheap!

I don't think £120 is bad for food but if you don't mind eating the same think a few days in a row a slow cooker is brilliant. You can buy cheap cuts of meat (like ox cheek), bung it in for a day or two with lots of cheap wine, stock and whatever you fancy and then have it as a stew, or 'pull' it like pulled pork and have it in sandwiches.

I always roast a chicken every week, have the roast on the day I cook it, then leftovers in sandwiches/ramen/soup/fajitas/curry, and make stock from the carcass (slow cooker again!) If you can get the whole chicken in M&S's Dine In deal you get a bottle of wine and some other nice bits too for £12, it's fab value.

Hi @TherapieTaxi, you sound incredibly sensible and financially mature. I'm very impressed that you have two months of expenses saved, well done. A few suggestions:
Transport: I'm guessing your £135 is a zone 1-2 monthly travelcard. Log on to the TFL website, check your journey history and add up how much you would spend if you used pay as you go instead. Are you able to work from home at all? I now work from home two days per week and then use pay as you go oyster instead of a monthly travelcard. For me, it works out cheaper. Whether or not you can work at home you might still be spending less than the monthly cost.
Food: Since you are in a flatshare, could you combine meals with your flatmates? Cooking one meal for several people works out cheaper than cooking several individual meals. You will also save on electricity/gas if you are all using the cooker separately. You can also cook one huge meal with enough for everyone's dinner and leftovers for everyone's lunch. Even if each flatmate cooks once per week I think you will notice a saving with this.
Union membership: Don't be tempted to cut this - very important!
Gym: Wow! What gym are you in for £4 per month?!
Treats and hobbies are where you can make savings if you want/need to but only you know what you are spending here. If you feel happy putting more details of these spends I'm sure plenty of people can advise (I'm happy to - I'm a budget pro).
My main suggestion would be, instead of looking at where you can make savings, instead decide how much you want to save. On pay day, move that amount out of your bank account into the savings account, then pay all of your bills, then what you have left is what you can spend on treats and hobbies. It's easier to do it that way than try to make savings after you've planned all of your treats.