What is the cost of living

[darknessontheedgeoftown]

Due to horrendous financial problems growing up this is a question which obsesses me. I also think some of the people around me deliberately overstate it to stop others feeling free to make career changes when they are not. On the following assumptions
Scenario A- single no children moderate social life run small car no housing costs couple of holidays a year
Scenario B- as above but with one child, non privately educated.

In both scenarios will assume a cost of living approximate to say an average UK Midlands market town (this isn't actually where I live but the non housing costs of living is the same).
Thanks in advance

unanswerable question, I'm afraid. Depends on your utility tariff and use, your insurance costs, what car you run if any, what food you eat, what you drink, what clothes you buy and dozens of other variables.

if you are trying to prove something to a partner/relative, this is not the way. Do a personal budget.

I don't understand the question

I mean how much net income do you need in your bank account each month to have a reasonable life, excluding rent and mortgage costs.

Have a look on the calculator on Money Advice service and you can work it out. I think the spread can be very wide as people have very different expectations, e.g. Holidays - camping in the U.K. or long haul 5*, small car - Merc A class or old Peugeot, clothes from Primark or Zara or Reiss? Etc.
When it comes to children, childcare costs can vary wildly, e.g. Someone might get a lot of help from grandparents while others have to fork out a lot until children are 12 or so...

Personally, I have a preference for nicer things so I think I'd need about 4-5k for scenario A (excluding mortgage, saving, investing, pension planning - just the lifestyle). Probably add 2k for a child to allow for childcare + food, clothes, activities etc.

At the cheaper end of the spectrum, I think you could get by on 2k in option A(cheap older car, cheap off season hols in Spain etc) or 3k with a child if you could work childcare out to cost less. Again assuming no housing costs, saving, investing or pension.

I think I know what you're getting at in a way. Eg One person thinking that a Ford isn't good enough, they need to drive an Audi doesn't mean that their cost of living includes the price of an Audi. It means that they have chosen to spend money on an Audi. Which is fine, but it's not a necessary cost of living. Food, utilities, rent and basic transport are necessary costs of living.

Oh ok well if I take off my rent but not other bills then I need £3,500 a month after tax.

I could live on a hell of a lot less but if I dropped my income then I wouldn't be able to upkeep things I like having.

JoJo I have never ever earned 4-5k per month and never will. If I thought this much was necessary to live reasonably I would be in a major depression and wonder how I had scraped by for the last 20 years. Surely there are very many people in the country (outside the London SE bubble) who have a take home of say £1600, maybe mortgage/rent of £600 and lead reasonable if somewhat thrifty lives on the rest?

The Joseph Roundtree Foundation publishes minimum income standards. That's normally a good guide. They have crunched the numbers on how long a pair of trousers from Asda should last and considered whether placemats and curtain rails are necessary for a dignified standard of living. The methodology is pretty detailed

Our bare essential bills, nice but basic food, nursery fees and no extras at all comes to about 900-1000 a month for two adults a small child and a baby (not allowing for housing costs). In real life we spend quite a bit more than that, but the core bills etc come out of our joint account and the rest comes out of our personal ones so we can tell the difference!

I do love the Joseph Rowntree Foundation!

If I thought this much was necessary to live reasonably I would be in a major depression and wonder how I had scraped by for the last 20 years

Well exactly, depends on your personal definition of 'reasonable'. Personally, I know that my expectations are pretty high. But then you mention having a social life and 2 holidays a year which some people on low incomes might find pretty indulgent.

You just need to do a calculation for what you consider 'reasonable'.

Even where you choose to live/size of property can dictate how much you've got left - we all have different expectations/needs.

There are people who deliberately overstate the amount needed to live reasonably in order to make others think they earn more than they do. IME this is a particularly London attitude.

You seem very bothered by this.

Reasonable is different things to different people. Reasonable to me is not having to worry about money and to most of the things that we want when we want so for my family we need 5.5k gross a month.

We could live on less of course but that wouldn't be a reasonable standard of living To me.

Work out your 'must-haves'. Anything over that is discretionary spending. (You might well be surprised by the results.)

Your must haves are...

Rent
Council tax
Tv licence
Water
Gas
Electric
Food
Travel

Anything else is extras. However you will need some spare money over from paying all of the above for clothing, shoes etc

To give you an idea my expenses are..

Rent - £625
Council tax - £92
Water - £60
Gas and electric together - £140 in winter
Mobile phone - £15
Fuel - £70
Car insurance - £50
Car finance - £670 but will be paid off next month
Nursery bill - £430
Car tax - £21
Food - £400

Non essential outgoings are..

Cleaner - £120
Bin cleaner - £8.50
Window cleaner - £6
Gardener in the summer - £20
Car cleaner - £10

Dd needs shoes every 3 months or so. These are generally £60 a time.

OK - plus contents insurance, haircuts , dentist, eye health, clothes and all the other stuff.

I also don't see pension contributions or savings.

So is there a problem?

I also think some of the people around me deliberately overstate it to stop others feeling free to make career changes when they are not

That is a really weird thing to say, And frankly, if you don't make a career change because someone else told you their cost of living is higher than it is, more fool you.

And even other people's ideas of "essentials" will vary - from BobbieDog's list, I'd scrap TV licence as an essential, but would add broadband and Netflix.

Yes, I agree with Narky - why would you make career choices on the basis of someone else's outgoings?

I forgot sky and broadband £115 a month