How much "disposable" income do you have left after all bills?

[rhthomp97]

Hi,

I wonder if you guys might be able to help me. I'm not a Mum but have stalked Mumsnet for years as it's an awesome place for advice! I finally have something I need some serious help with and thought there would be loads of you here with useful advice.

My boyfriend and I are in our early 20s and are looking to buy a house, we have all of the paperwork in order (AIP etc.). However, both of us are currently living at home so are clueless as to how much it costs to run a household.

Our joint monthly take home pay is AT LEAST £2800. This is provided my BF doesn't do any overtime and I don't make any commission. We are looking at a mortgage payment of around £540 per month.

My question is if this budget is realistic, if I am missing any expenses, and if what we have leftover is a reasonable number to live off per month.

Monthly Income: £2800

Mortgage: £540
Council Tax: £180
Gas, Electric, Water Bill (4 bed house, 2 occupants): £150
Home Insurance: £20
Internet & Phone Line: £25
Now TV: £15
Food Shop: £300 (boyfriend works a manual job so takes some feeding)
Petrol (2 x cars): £240
Boyfriends Car Payment: £180

TV Licence would be paid for the year out of another fund. Both of us have mobile phones provided through work. This would leaves us with £1070 as "disposable income," per month, but out of that we would ideally be looking to save some. We also have car insurance and MOTs to think about come July.

We have 5k untouched savings as an "emergency fund" like a broke boiler etc.

So the questions I'm asking is:

1. Are those utility bills realistic, have I overestimated, or underestimated any?
2. Have I missed any other household bills?
3. Is £1070 per month plenty as disposable? How much do you have as disposable income after bills? £1070 feels like a huge amount, and is I imagine when compared to most families in the UK. That number would change of course once car insurance, MOT expenses etc. are paid.

I appreciate your responses!

Yep. You'll be absolutely fine.

Next.

Are you both contributing to pensions?

That all sounds good...just don’t go and have a baby anytime soon tbh OP....mat leave and childcare will wipe that CLEAN!!

Oh and we probably have about 7k left after bills but we are in our mid 30’s with no mortgage and my dh has a tax free job. So our situation is neither here nor there 🤷‍♀️

More than enough as you've already underestimated your earnings by not including over time or commission and your bills seem realistic, enjoy your new home together 😀

@Settlersofcatan Yes, we're both already contributing to workplace pensions. So our combined wages are minus that amount already.

Wow! Very lucky!

That’s about the same as mine after all my bills are paid and we are ok, sometimes something comes up like losing my fence in a storm which means I go into my overdraft... and have to catch up the next month otherwise we are ok.

I don’t think 300 is enough if he eats alot and you are counting toiletries, toilet paper , cleaning products etc. People will argue it’s loads though

Don’t think about your car insurance and MOT “come July” - think about it now. And tax?

This is where many people come unstuck with a budget. They just list the monthly expenses and think, “oh the other stuff comes from spends, when it needs to”. Which means you underestimate your average monthly outgoings. For young people, car insurance can be quite significant too. So work out all of those annual costs and put them into your budget.

Saving for a holiday?
Birthday presents?

Your house insurance looks low at £20 - buildings and contents for a 4 bed?

I think that all sounds fine.

Assuming you’ve both got into great savings habits for the house deposit keep those up once you’ve moved as an investment in the future.

Good luck with the purchase

Sounds realistic to me. Also our bills arent static as our gas and electic direct debit changes (3 bedroom and was paying 110 until recently now 96)

Our bills are roughly

Mortgage- £680
Council Tax £185
Electricity -£120 (no gas and we have electric car)
TV license, Landline, Fibre, Sky, Netflicks

Surely you know that’s fine.

@Lipperfromchipper wow that’s bullshit.

We have similar income each month but much higher housing costs and two kids and we are fine.

@Helpme1010 they have just over 1k spare... that will be just about enough for childcare depending on hours needed I suppose! Not bullshit at all...

You need to factor in things like, hair cuts, petrol, birthdays, Christmas, holidays, car breakdowns, tv licence, opticians, dentist, clothes, shoes, toiletries, repairs to the home etc. List them all and divide it by 12 and then take that off your disposable budget every month and see what's left. Be realistic about what you spend. I actually added up the real cost of xmas this year instead of guessing and it was eye watering.

@Lipperfromchipper well we manage!! Our housing costs are nearly double.

They’d get help with child care too in either tax free childcare or tax credits. I’m not saying it’d be easy but it’s definitely do able. You get used to living within your means

@Helpme1010 that’s settled then I suppose 🤷‍♀️

You have £5K emergency fund, which is great. But it only covers something like a new boiler, new car. It won’t go far with a major life change - one of you being sick / unemployed for 6 months, for example. You potentially have some safety as you have room for 2 lodgers. But I think your monthly outgoings should include a savings amount - to take you up to at least 6 months outgoings.

I would say it's just enough. You'll still have to watch money but its do able. Good luck in your new home x

@Lipperfromchipper how do you have 7k spare and not pay tax or have I read that wrong?

@undomesticgodde55 my dh’s job takes him out of the country for over half of the year so he is exempt from tax.

@Lipperfromchipper you learn something new everyday. DP is now sitting next to me telling me he's had job offers with similar exemptions - now tempted to tell him to work abroad 😂. Must be hard not seeing him for long periods though.

Money Saving Expert have a really good budget planner that makes you think about all the little things and the annual expenses.