How realistic is it to live on £1.2k after mortgage and bills

[YourGreenDreamer]

Hi all,

You may remember me (27F) from the thread I made about securing a 3bed semi house (£245k, 5yr fixed at 4.79%) as a single buyer.

Majority... if not, all advised that I was in a great position and should go for the house but I'm not sure if there was a focus on the fact that I'd be living on £1.2k before I get a lodger... if I find a lodger. So my concern is that I'm biting off more than I can chew.

My take home after NI, tax, student loan and pension is £2,565. My monthly repayments will be £970pm (5years fixed rate). I am budgeting £370pm for my bills:
£159 council tax (excluding single persons discount - in the event I have a lodger)
£75 gas(?) - no idea if this is realistic in a 3bed semi detached with 1-2ppl at home. Same concern for electric and water
£75 electric (?)
£21 water (?) - I have no idea how to calculate how much water would be per month? Could someone provide some information please. How would I find out?
£27 broadband
£16 sim only deal

I have no dependents but would love to have children in the near future. That's with or without a partner. How would I manage on just £1.2k disposable? So very scary...

I really do love the house and think it'd be a great investment but I'm concerned that I can't afford it. People say your mortgage shouldn't be anymore than 35% of your take home. Well for me with bills included it'll be nearing 50% of my take home.

Again, any advice is appreciated.

Thank you.

But the money to pay the insurance in full has to come from somewhere, so you need to budget for it.

Go over to mse and get the spreadsheet that will allow you to do a proper budget. Then you can actually see.

Whatever figure you posted on here as disposable income, from £0-£10000, you'd have some saying not enough and others saying it's loads more than me. So you need to work out whether it's doable for you, and how much is actually disposable.

You're 27 and your entire income is currently disposable? You don't pay any bills or food?

Well if you don’t spend it now you don’t need it.

Our net income is about £4.4k. Bills come to £4k (inc childcare), credit cards takes the rest pretty much. Cost of living has fucked us as mortgage has gone up by a third.

This will go down to about £3.4k though soon as nursery stops and horse nearly dead. So we will survive. We can pay everything to live, there’s just fuck all left.

I’m slightly part time now (4 days) but can increase hours to full time if we get desperate. And I have a BTL to liquidate.

I haven’t had £1.2k disposable since I was single, childless and horseless. Then in my wisdom I acquired husband, horse and DD.

Yes, I live at home with parents.They don't have me pay for anything as they want me to save as much as I can to get on the ladder.

Yes food is an expense but it doesn't leave a dent in my take home so wouldn't count it as such.

That is plenty! My bills are way higher than you've calculated, but I run a car, have a cat (pet insurance and a vet plan), and a teenage daughter 50% of the time. And I still have money for clothes, make-up, occasional meals out, annual holiday.

You do need to account for insurance though - life cover on the mortgage (probably around £25 a month) plus building and contents. Even if you pay in full, you want to put aside an amount each month to pay for next year's. And premiums are going up due to costs going up, even if you never claim.

You might also want to look at boiler cover. And putting aside an amount each month for any necessary house repairs, so that you're not completely stung for unexpected bills.

My gas/electric is £100 a month but I've built up credit of £500 when they whacked my DD up to £200 a month at the end of 2022. That was a wake-up call and I got very frugal - changed all the lightbulbs to LED, turned off the heating as much as possible, bought an airfryer instead of using the oven etc. I'm in a 3 bed and it's just me 50% of the time, and DD with me 50% of the time.

A lodger won't be as thoughtful regarding utilities use, so bear that in mind when setting rent.

Thank you, that's all very helpful

If it helps we are 2 in a 3 bed end terrace
Gas and electric are 170 combined
Water is 37. But is your water metered? If not it will be dearer.

How much will you spend on furniture furnishings appliances?
Holidays?
New boiler or other household expenses?
Put some money aside each month for those
But you seem to have enough to live off

You say you don't watch TV but if you are streaming shows you will still need to pay for streaming services eg Netflix / Prime etc.If streaming iPlayer you need a TV licence even if you are only watching on a laptop. Or do you only use watch things like YouTube?

Have you accounted for:

House insurance (buildings and contents)
Critical illness insurance
Gas, electricity, water
Community charge
Broadband
Phone
Emergency maintenance (broken bog cistern, leaky drainpipe, forgotten keys, etc)
Hairdresser
Dentist
Fares for work
Christmas
Birthdays
Decorating
Holidays
Clothes (2 bras, six knickers, two shoes, two tops, trousers, frock, coat) pa

It all adds up.

Good luck. It isn't as much as it sounds. Have you included food?

Food is our second biggest expense- of course it has a dent on your finances and anything you pay annually still has to be budgeted for. We pay our house insurance annually but still have to put £75 aside for it monthly (ours is fecking extortionate-about £1k).

If you WFH you still presumably leave the house and have some travel costs. And I can’t see how you stream TV legally at zero cost. If so pray tell. We have TV license, Disney+, Now and Netflix, granted they aren’t essential and I could live with only one of them if it was only me but life would be bloody awful without some TV.

It seems I've offended some people with this post and that was not my intention at all. I understand 1.2k disposable is what some can only wish for but I'm coming from a place of never having huge financial commitments, new to the world of owning a house and all the expenses that come with it and above all, learning to live on less that I'm use to.

I've always been a serial saver. I've been saving for years to even get to this point. On my new take home, I won't be able to travel or save the way I've been able to pre-mortgage and that's fine I've accepted that. I've had my fun, now it's time to get on the ladder and future proof myself.

This post is not to "boast" about how much disposable I have left... I personally don't even think it's enough to boast! The post was to get some opinions on whether or not I was biting off more than I can chew before I sign the dotted line...

It sounds absolutely fine for you as a single person, or part of a couple.

You will struggle for the first few years if you choose to have a child alone. A full time nursery/childminder place won't give you much (of any) change from £1000. Even with the new 'funding' arrangement, you'd be unlikely to bring your bill down to under £600 (and that's being very optimistic on what the scheme might provide).

With a child, you'd be looking at that £1200 coming down to between £100-600, which to feed, clothe etc is somewhere between tight and non-doable.

That's my fear. I want to be able to afford having a child with or without someone and may not be possible with a huge mortgage over my head. Unless I find a great guy with a great job lol wish me luck. Not been having any luck with that but that's another thread 😋

I don't know what to do. I was going to let go of the house last week but so many people here said to go for it and I think I should but I'll not being able to afford a baby is a real concern to me.

Especially as i don't think I'd qualify for any financial relief....

🙄

Well considering I live off £300 after mortgage and bills, I'd say that's fine.

Similar to you, I have a 3 bed house just me and take home is £3k a month. Mortgage is slightly less at £800 and all other bills included takes me to £1400 not including my food or insurance or my car mot etc.

I have £1.6k left disposable I save £1k a month the other £600 is for food, going out etc. The £1k I save I only need to save one month to cover my insurances and mot as I pay those annually.

For one person my gas and electricity averages £2.50 a day together so approx £70 a month in winter it was average £4-£5 a day due to hearing so closer to £150 pm. Note I do go to the office 4days so thats why it's kept low.

My water average is £20 a month on meter.

So yes it's doable for you.

I also go on at least 4 holidays a yr as I save £1k a month.

Obviously if I have kids thay will pretty much disappear but then I would hope I am with someone bringing in another income

were a family of 5 and managed to live of 1200 after bills and mortgage for almost 3 years! I’m sure you’ll be fine

Having a baby without a home is hard esp trying to rent in the UK
And I think 1.2k disposable income a month is fine for a single person.

But you write like your circumstances will be stuck in time. Things change ...you may get a job that pays more or meet a partner or if things were difficult you could rent your house out and move back to where you are at now. You will always have options

All I know that if given a chance to get on the property ladder and at 245k Id grab it ...Only the first few years are hard and you can fix your mortgage . After that your debt decreases with time and inflation and usually your salary increases. You are only 27...you still have years yet to meet someone and have a baby so maybe not put pressure on yourself and indirectly others. My sister had her first at 36...by then you would have paid alot of your mortgage off

I turned down buying a 3 bed flat in West Hampsted because I was afraid I would have not enough disposable income when in my 20s, That was in 1992 . That flat is now worth 1.2 million and I would have had the 70K mortgage paid off a long time now

When I did get round to buying flats were alot more expensive and I ended up buying in a not so swanky/profitable location. I should have bought that flat then and I would be retired now..

BTW people do have babies with no houses, no jobs and no money...people find a way

After mortgage, food, bills I have about £50pm so I think you'll be fine, I manage on min wage

As a single person my water is £29pm and gas/electric £100pm over the year

@YourGreenDreamer These are sensible questions to ask given it’s a big financial commitment and you’re also planning to have kids in the near future. With mortgage rates going down, have you checked that 4.79% is the best rate you can get? Not sure it makes sense to fix it for 5 years when rates are so high. Consider going for a longer mortgage term if you can, you will have more flexibility (can choose to overpay or save).

I would recommend building up a buffer for the costs of having a baby and childcare. Find the best interest rates and set up a regular saver or two if you can afford it (and make sure you transfer it to another account that pays better interest when it matures!) £1.2k per month (minus food, transport costs, insurance etc) will not be enough to cover nursery fees so you will need to top it up by drawing on the buffer. The more you can save now, the more prepared you will be when the child-related costs hit you (and you would also be used to having less discretionary expenditure). If you’re planning to have a baby, then you might not want/be able to have a lodger anyway so the most prudent assumption when you’re projecting your income and expenses is no lodger. Check your maternity benefits at your current employer so you can figure out the impact on your take home pay. I would do this regardless of whether you have a partner or not, keep control over your finances.

Thank you, very helpful to see your numbers and compare it to mine. Can I ask the bills and expenses you've accounted for. I hope I haven't underestimated mine or not accounted for other obvious expenses

Ignore the "your mortgage shouldn't be more than x % of your income" tripe.

A person with £4k take home and a £2k mortgage each month is in a better position than a person with a £2k take home and £500 mortgage per month.

You are in a great position. You're going to have to jump sometime. Now is as good as it's going to get for you imo.

Sure
So £1400 roughly breaks down to
Mortgage £775
Gas and elec on DD £140 i keep this high over summer to build up for winter but my summer bills are £70
Council tax £145 single person discount
Broadband and mobile is £40
Gym £40
Denplan £36
Private pension £20 to keep it going
Credit card £80
Subscriptions like netflix etc. Total around £36

I pay water every 6month so I know the month it comes out I just pay the £120 out of the savings for that month

I know other ppl will break down food and insurances but I pay car and house stuff annually so easier to just put £1k from one month's saving aside for that.

So as before thays £1.6k left over, £1k saving for holidays, wmerfenices of fhose annual bills and then £600pm covers food, toiletries, going out etc. Gives me some flexibility in not having to always budget so tightly as I don't feel I need to. I do feel like I can do better and save more and not spend £600pm but for now I'm comfortable with my spending.

thank you. i was starting to feel like i asked something silly but you're right it's a huge financial commitment. i need to know exactly what i'm getting myself into and whether i can actually afford it... objectively speaking.

i wish i could fix for 2 years but the only lender that'll give me what i need needs me to fix for 5 years.

i will certainly have to build that buffer. would probably need a lodger to help do that.