Tell me where to start

[Buntybearbess]

I’m completely and utterly overwhelmed by saving and finances and have no idea how to start budgeting, saving and managing my finances. I’m in my early 20’s receive PIP at £420 a month and as I’m a full time student I get the full maintaince loan (I know I’ll have to pay it back but the interest I’ll have from saving what I’m not spending is better than what I’d get in a loan).

I’ve also never worked but I’m improving my CV by volunteering with different church projects and charities and I’ve an appointment with the careers service at my uni so hopefully I can start generating income that I way. I need to work out my savings for bills, rent and other expenses particularly as I’m hoping to learn how to drive this year to improve my employability (and then I’m hoping to do advanced and other driving courses for the same reason).

Please can someone tell me where to start. I have two empty ISAs as I know I’ll need them to save but have no idea what to do with them. I’m thinking one for rent and bills and savings in the other for holidays/mortgage and then take money out each week for shopping/busses and the like.

Do you live with your parents?
Exactly how much money do you get each month and how much do you spend and on what?

I live in a student house, my rent is £1300 every four months. I get £460 a month PIP which is £70 per month phone bill, £5 per month music streaming service and then £6 and £5 per month movie streaming service and then £79 per year for amazon prime membership. I think I get £8000 per year maintenance loan from SFE.

I have no idea how much I spend monthly on food and utilities and I am aware I probably spend far too much on useless crap. I also spend a fair bit on course books as well.

You need to write down exactly where you spending your money. Be honest and list everything. Then you can cut your cloth accordingly.

I picked up a little spending tracker pad thing from poundland so I'm going to use that over the next month to pin down what I am spending and where. That way I can see any patterns that appear and deal with them accordingly. I'm gonna work out exactly how much my bills are and then work out how much I can save each month and how much I can spend and then only spend cash and not use my card. That way I won't forget about what I'm spending while I'm out. My problem with shopping online (amazon) is that I can buy it instantly so what I'll do their is write down the things that I need in one list and the things that I want in the other. (Other than course books because they're bought as and when I need them) At the end of the month if I still need the stuff on the need list I'll buy them, the stuff on the want list if I don't want an item it'll be crossed off and if I can afford an item I want after bills and savings I'll buy one, if I can see myself using it immediately and long term. If it wont be used immediately it'll be added to my wishlist instead and I'll wait for a sale or a gift card.

£70 for the phone is an exorbitant amount. Unless you get a job that only pays for luxuries, you simply can’t afford to have the latest phone, amazon prime, spotify,netflix etc. Say a Saturday job or something similar, to pay for entertainment only. If you haven’t got the time, see if you can cope with less streaming, ie: do you really need 2 movie streaming accounts? 3 if you count amazon. Same goes for spotify, you can use amazon instead.

The books for Uni can be borrowed from the library. Yes, you have to be on the ball and get there before the whole cohort needs it, but it would save you money. Some books you might have to buy, see if the Uni bookshop hasn’t got second hand copies for sale. It is a bit of an inconvenience, but again, it will save you money.

You have £460 PIP, the rent is 350. That leaves you £110. Out of which you pay £70 for the phone. That leaves you 40 for all the streaming, amazon.
The £8000 loan translates as £666 per month. For food, clothes and the rest.
Give yourself a budget: £150 for food, and that includes take aways. And keep an eye where the remaining £500 go.
Think about an emergency fund. Put away £50 every month for when the proverbial hits the fan.
Put another £50 aside for festival tickets/holidays.

There’s no one’s job but yours to look after your finances. It’s not a big scary thing, take control, don’t let them control you.

Come back when you have a detailed list of what you’re spending, we’ll have a look for you and suggest where you could save.
HTH

@8FencingWire, the phone bill also covers insurance for it which is £15 per month. It's not the latest phone it just has a very large data allowance. My brother in law is apparently going to show me how to find a better deal for when the contract ends in april. I don't use spotify the music streaming is Amazon unlimited, which I'll only have for three months as that's when the student deal runs out and I'm not paying more than what I am now for it when Amazon has most of what I listen too anyway. The steaming services I justify spending money on by not going out drinking/clubbing or buying DVD's. I buy the course books because I'm severely dyslexic and take longer to read them than library loans allow for, plus it means I can add notes to them as I go. I do however buy most of them on kindle or Abebooks or check Oxfam books or the secondhand uni selling pages first.

I don't really buy new clothes, the ones I have a in good condition so there's no need. I think at the moment most of my money is being spend on train fairs as I've needed to travel back home several times and junk food on the days I've been travelling.

I have no idea how I'm managing to waste spend so much money and have no idea where it's going. It's ridiculous that I've not been able to take control of my finances but I've also never had 'disposable' income before so other than making sure I had enough for necessities and bills I've never had to worry about it. Today/tomorrow/Saturday is going to be spent sorting through my finances and seeing where it's been going and working everything out.

I totally get the need to buy your own books, I am severely dyslexic too, I had help from Uni with funds for books and a computer.

If you look at your bank statement, last november, say, it would give you an accurate ideea of what you’re spending.
If you list your expenses under 4 columns: general, leisure, culture, unexpected extras, you’ll be able to see a bit easier where the big spend is.
In general include food, bills etc. In leisure the times you went out, movie streaming, went for a swim etc. In culture put the books, the exhibitions etc.
My bet is: your biggest expense is under unexpected extras, they hit the hardest and tip the balance because it’s not something you budgeted for.

If you own a house, or have to move, say, the cost of hiring a van, estate agent fees etc are unexpected extras. The boiler breaking down. The car not passing the MOT (hefty service bill). Having to take the train more often than usual. These are unexpected extras.
One would, hopefully, cover them with savings. Because when you’re between a rock and a hard place, the only thing that’s going to help is a bit of money.

Do you know about money saving expert website? It’s a goldmine of financial information. Have a look.

I wouldn’t bother with isa in this climate but use marks and Spencer’s regular saver and nationwide regular saver for the first year of saving - higher interest rate and your not working

Use Martin Lewis website to see how to apply

Do one thing at a time. You are not in a position to invest, so close the ISA's.

Concentrate on tracking all your spending. You need a firm grip of what your income is each month and what your outgoings are. Reduce costs so that your income exceeds your outgoings.

From the excess, now save up a small emergency fund, perhaps £500. This is a little pot of money for if something unexpected happens, some travel to a relatives funeral, a problem with your accommodation, a delay in a payment.

How you have a safety net you can pay aggressively off any debts.

Two things stand out to me. If you have additional needs (indicated by the award of PIP) then you should be able to claim DSA. Both my husband and daughter have dyslexia (as well as other processing problems) and they were awarded DSA to help with the extra costs for example of buying books or getting lots of photocopies. Also for extra support.

Also, if you're going to keep Amazon Prime students get it at a much reduced cost. I think about £39 for the year.

Start tracking everything you spend. Once you find out where your money goest you can work out where to save.

@nannynick ok, closing the ISA’s and sitting tracking my spending tonight. I have enough money in my account that I could realistically save about £800 as an emergency fund now.

@vintagebella, yeah I’m autistic with a whole load of learning and processing difficulties as well as behavioural disorders that make functional skills (basic things you need for day to day living) poor and limited to an extent, and something I need to learn systematically rather than picking up automatically like others, unfortunately no one in my family is good with finances because they all have LD’s in some way as well, they just about get by and seem to just lose money because they spend without thinking and I don’t want to follow that. I’ll see if I can look into my DSA again. I know I get it but I’ve no idea what it extends too. I’ll email amazon and ask about student prices and see what they say. They’re usually pretty good tbh.

£800 is great. Mark that as your emergency fund, not for spending. It will give you some peace of mind. Track the spending, see if you are spending more money on some things than you thought you were, then you can create a realistic cash flow plan for each month.

I'm on the spectrum, I find I learn best via audio... do you like podcasts? This is a good one: Meaningful Money (links to website for online listening) also available via iTunes, various Android podcast apps and Spotify.