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.

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.

In fairness, we'd all be able to save if we lived at home with our parents and paid no bills

My daughter had similar worries to you when she took out her first mortgage - she cancelled all her subscriptions, didn't dare eat out or buy anything frivolous.

That was 2 years ago - she's over it now and is always booking holidays 🤣 it's normal (and sensible) to worry about these things before making such a big financial commitment but with that surplus you've got quite a bit of wriggle room...more than most tbf. Besides, you have to live somewhere - assuming your parents will at some point want you to leave, so it's either take on a mortgage, or rent - both come with a shitload of bills that can't be avoided unfortunately.

Enjoy your new home and relax, you'll be fine.

insurance will be paid in full so as to keep my monthly expenses down.

When calculating your monthly expenses you divide the annual payment figure by 12.

With weekly things, multiply by 52 then divide the answer by 12 to get the monthly figure.

Do that for everything that is a necessity and isn't an optional extra, including basic food/toiletries/cleaning products/clothing.

When you've got your monthly grand total for all necessary expenses, take your net income and minus your expenses figure. The answer is your disposable income monthly. Have it transferred each month into another bank account then ignore what is in the main bank account, because however much it may be, it's all accounted for so you can only use it for your basic necessary expenses. This is how you don't accidentally overspend on unnecessary things.

Please also take a second to think of those who do this calculation and find they're left with a minus figure at the end, so have to work out which of these essentials they can do without to make the figures work. Those are the people living paycheck to paycheck, not you. You're not actually skint if the reason you have no money to spend is because you've put it in a savings account.

@YourGreenDreamer I’m going to go against the grain here and suggest not having a lodger but to either take an additional PT job or start a side hustle. This is your first home and you’ll want to do it up, spend time in it and generally enjoy it. Lodgers do not always have the same respect for your house or bills and I can only see that being an issue for you given that you like to live frugally. It’s also a lot to buy a house and become a landlord at the same time - my prediction is that you’ll be back asking for advice about how to ask your lodger to have 5 minute showers rather than baths or the fact they use up all of your milk. Unless you don’t want to live alone or need the company, I’d avoid that as a solution.

Without trying to sound condescending, not paying for a subscription for tv services (like a dodgy fire stick) is inviting the fox into your hen house… these devices often bring malware into your tech which compromises your banking security etc.Unless you only watch TikTok or YouTube exclusively, I don’t see how you are streaming for a cost of £0…

But 100% I’d be saying buy the house. £1200 is more than enough to live off. If your goal is to start a family in the next 5 or so years, I’d suggest saving at least 6-12 months of expenses and putting that aside to cover mat leave. In the event you meet someone, do not allow them to contribute to the mortgage unless this is the person you intend to marry. Good luck with the purchase!

I think you’re missing quite a lot:
tv licence
tv subscriptions
car insurance
tax/mot /repairs or if not public transport fees
petrol
food
home insurance

It seems I've offended some people with this post and that was not my intention at all

I think you've couched your posts in terms which are tone deaf and I expect that's because you're young and you've never experienced poverty

Learn from the critiques here, rather than being snippy at the posters

Many many people on MN are desperately struggling each week to make ends meet and failing

£1200.00 spare cash per month is a LOT of money to many people

Empathy goes a long way

Is £1200.00 spare cash each month enough for YOU?

From what you've said, I don't think you've included all outgoings and if you decide to have a baby and bring the child up alone, you'll struggle

One thing I don't think anyone has mentioned is that you've said a couple of times you might have a child alone. Ignoring the costs of raising a child, going through fertility treatment to conceive a child is expensive. IUI is a lot cheaper than IVF, but has lower success rates so you can end up doing multiple rounds.

If you want to start treatment (if you don't meet someone) at around 30 (for example), I would be saving around £150 a month, so that you've got around 5k on starting. Obviously a bit less per month if you would want to start later.

We don't have a mortgage and we worked it out that all in, we spend 1000 on the rest. That's all taxes, food, cleaning, random small buys, entertainment, take aways, amazon, etc.

Banking the rest would be a good idea for random costs relating to car, DIY. You'll be fine :)

I think you'll be ok with some budgeting. We have a pretty high disposable after everything (including money to savings I should add). Probably around £2.4K - that's me, DH and 2 DC. It's plenty but it does go quickly. We put an amount into an account for food and kids things and then each have £700 for 'stuff' which includes phone subscriptions and work travel.

It really does depend on your lifestyle - we rarely eat out and I do a lot of Vinted shopping. At your age I was doing a lot of gigs, festivals, out drinking etc and to be honest would have very quickly gone through £1.2k. But I earned well in my late 20s (take home similar to yours but nearly 20 years ago) costs have gone through the roof so money stretched further then.

The problem with MN is you can't post about things like this as it's real race to the bottom mentality when it comes to money. Yes people earn less and survive on less but you could say that about everything in life, everyone has different circumstances, and it doesn't invalidate your question. The money forums are better for slightly more impartial viewpoints.

It seems more than enough to allow you to save and live a decent enough life.

What do you think you will ne spending £300 a week on? You've said you don't drive or travel to work. Food won't be much, £50 a week max, more likely £30 if you know how to cook.

No TV licence etc as you stream.

You will need furniture, but that can easily be found on Facebook etc if you're not fussy, and replace with new as you get settled. Decorating, if done by yourself, isn't expensive either.

What do you think you will be spending the £1200 on and maybe we can work put if you're going to be over stretched?

That seems like enough for a single person. It would be tight with multiple people to feed and clothes but just you, fine.

Are there cheaper houses you could buy in your locality? Because if 245k is the lower end anyway, I think you will probably have to make peace with your mortgage being near the 1k a month amount. It’s not like living with your parents forever is ideal and of course you are going to have less disposable income in your own home than you have now. A lodger is also not a solution if you plan to have children quite soon. You won’t want that person constantly there when you have a family. I imagine 1.2k income left over is absolutely fine for a single person but probably not once children are thrown in to the mix.

Why are people suggesting life cover for a single person? ASU maybe if you are particularly risk adverse, but unless it is going to cost peanuts, with no dependents I wouldn't bother.

For a single person is fine. When kids come into the picture not at all. If you just go and have a child by yourself you would need to stop working for a bit or pay for childcare. That is a completely different scenario.

£300 a week is easily spent. Let's say you need a new winter coat or shoes. Your washing machine breaks down, you need a plumber. It's a friends birthday and you go to a nice restaurant. It's Christmas and you need to buy gifts. It's absolutely double to live on that money but I think some months will be easier than others.

Exactly. I don't bother either. I have over the years built up a 12 months emergency saving that I never touch thay will cover my basic bills and mortgage should I be made redundant or ill for a while so don't bother with any of those other insurances.

@YourGreenDreamer it is always going to be a big chunk of money to live independently and great that you are in that position at 27. If is tight, but doable (which it seems like it is) that is ok, you then have to think about your job prospects, what is the likelihood that you will be able to get meaningful pay rises in say the next couple of years to bring the mortgage cost to a lower percentage? I also hate to ask, but are you paying into a pension? Believe me, if you aren't, then when you hit 50+ you will wish you had put more in when younger!
Also what age were you hoping to start trying for children? Children are a huge financial and emotional drain and it is this step that I think will impact you the most whether your mortgage is £400 or £1000 because before that, it is just about you and if you lose your job/house, no bother you can move easily to get another, different with children in tow.

I don't think it's entirely realistic in terms of having a child on your own, presuming you'd need childcare which will eat that budget right up, but I wouldn't not do it for that reason. Buying is sensible, you can afford it on your own, and you can save/improve pay and equity/ maybe find a partner in the meantime.

I'd look at that 1.2K carefully and work out how you want to save and spend it, because whilst it sounds a lot, it can still be easily spent and you'll want some good savings behind you, maybe holidays etc.

My disposable income after bills, mortgage, food shop is £300 and I have to take fuel from that. You'll live.

It sound it could be tight but when I bought my house if times were hard I got a second job

One thing at a time. Buy the house first and get settled, work out your budget based on your actual living costs.

You can't put off buying a house because you want a child in future and that will make life more expensive, that's weird logic. Once you're settled in your house, financially and otherwise, you can consider your next step. You're still young so you have time to meet someone and have a child with them. If you don't meet anyone you can consider the cost of single parenthood at that point.

One thing is sure, it's going to be hard to meet someone and to have a baby if you're still living with your parents.

What’s the alternative scenario? Investment in property is nearly always a good thing. We currently live paycheck to paycheck since rises in COL but longer term, things will improve and I have no regrets about buying our own home. It sounds like you’re overthinking it. 1.2k disposable income is perfectly comfortable for the majority of people. Many live on several hundred less.

I’m not single but we have seperate finances and after bills and food i have £500 a month. I save around £300 a month before i give myself my disposable We have no kids. I’m used to earning on the low side … currently £25k. Just make sure you have calculated everything. It will be a shock to the system paying out when you’ve never had to but it’s fine and doable. Have you still any savings left?

I have a single friend who lives alone and earns a little more than me but less than you. She has had to adapt to cost of living more than we have but is still going on city holidays and out and about. Everything is on the cheaper side and she is careful. But she is still living life.

We live on £1600-£1800 p/m disposable as a family of four.

What’s the alternative? You could buy a smaller cheaper place which could mean no option for a lodger and you would possibly need to move again if you start a family. So that would more than double all the costs of moving and you’d pay standard stamp duty as no longer a ftb.
As time goes on your income will increase so things are likely to get easier.
I also think that £1200 a month to cover food and other spends is comfortable. I would try to save at least £200 of that to cover annual bills and build up a buffer. There are quite a few banks that offer a decent interest rate for regular savings.
My disposable income has dropped recently (for different reasons) to about that level from around double that and I’m managing just fine. I am more careful and more aware of what I’m spending but I don’t feel skint and I’m certainly no less happy than when I was spending more.

I would get on and buy the house, because I genuinely feel that there are a lot of people holding back moving and waiting for rates to drop (all whilst saving instead) and then another wave of house price increases will hit. I think if you can stomach the mortgage rate for a few years and then get a new mortgage at a lower rate you will gain equity and more disposable income down the line. You just need to ride this tight time for mortgage holders! Buying your first home is an expensive phase of life and I honestly think it teaches you resourceful and sets you up as a independent adult.

If I were you i'd get the house and save as much of your disposable as possible. These are the things that will save you a fortune

• get household items off facebook marketplace/vinted/ whatever else is good and cheap
• make your own food to take to work
• eat a snack before you go out for meals (and order small!)
• be minimalistic
• find free hobbies or minimal cost ones
• find friends who don't spend big! Find friends who are happy with walks and a flask!!
• if you want to give up drinking alcohol (it's expensive)

On the child front I'd absolutely be aiming to find a responsible partner over doing it alone, but still save your ivf nest egg incase push comes to shove.

If you're concerned about money now throw childcare costs, term time holiday costs, babysitters, dressing /feeding/entertaining them into your budget and you'll quickly find you have no money. Mine is currently asking for a trip to disneyland and a dog!

Congratulations by the way. At 27 you are on good pay and buying your first home! You deserve a high five 👋