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.

Come on OP, you know very well it's more than realistic.

For most people, buying your first house feels tight. It means it might take you a while to do the house up. It means you might have to meal plan or might be able to have holidays. However, assuming you don’t move, that gets easier over time. It’s only the first few years that it is tight. You have to ask whether you’d prefer it to be tight now at 27 with a good salary that is likely to increase or tight when you’re retired, your parents are dead (let’s assume you haven’t inherited as they had care home fees) and you’re privately renting?

You’re 27. You don’t need to worry about going it by yourself to have a child yet. If you have any disposable income left for savings, I’d save to do egg harvesting but you don’t need to actually revisit having kids by yourself for 10 years. After 10 years you will have 10 years of equity built up, the mortgage will be a lot more manageable and you may be able to extend the term or stop overpaying the mortgage while you deal with childcare. Hopefully by then you have a partner, which does make household expenses easier. It’s going to feel tight as you’ve never had any financial commitments but when you have kids, you’ll back to this point and wonder how you never thought you’d survive on £1200 disposable income.

These are the non-monthly or fluctuating expenses that I save up for. You'd need to cross out or fill in the amounts for you. You could replace my grandchildren budget line with costs related to future child-care!!!

Alcohol
Art
Beds
Birds
Birthdays
Boiler Service
Books and Maps
Bus
Car Breakdown Cover
Car Insurance
Car Petrol
Car Servicing and MOT
Car Tax
CDs
Chiropody
Christmas
Clothes
Club and Membership Fees
Cold remedy, tissues, vitamins, etc
Collectables
Computer Equipment
Computer Ink
Computer Paper
Days Out
Dentist
DVDs and Blu-Rays
Electrical Replacement
Food and Household Goods
Funeral Expenses
Furniture
Gambling
Garden
Grandchildren
Hair Cuts
Health Care - Long Term
Hobbies
Holidays
House Insurance
House Maintenance - Long Term
House Maintenance - Short term
House Move Costs - Sols, Surveyor, Removals, Keys, etc
Irregular NonFood NonPet Shop
Kitchen Equipment
Linen
Meals Out/Take-Away
Opticians
Other Health
Passports
Pets - Equipment
Pets - Grooming
Pets - Kennels
Pets - Monthly Shop
Pets - Vets
Pocket Money
Post and Packaging
Shoes
Software
Solicitors - Non House Move
Taxi
Train Fares
TV Licence
Unexpected Expenses Fund
Wedding Expenses
Window Cleaning

I totally understand your worries as a single house buyer. It so much depends on where you live and you are right to plan ahead with such a commitment especially if you want to have a child. Full time nursery in London would be close to two grand a month, for example. it is all relative depending on where you live.

There’s a good budget calculator on the MSE forums.

You need to include annual costs like insurance in your monthly total even if you don’t pay it that way. Same with maintenance etc.

I get it. It’s a big responsibility on your own and quite scary using all your savings.

You sound like a planner so maybe having things allocated to different pots within your accounts will help you?

Expect the first couple of months to be more expensive and don’t panic. Even if you have furniture etc the small things mount up when you need a curtain pole, sand paper, filler, a dish drainer etc etc.

If you are anxious have you looked at extending the term of the mortgage but setting up regular overpayment to avoid the extra interest? That way if something bad happened one month you could make a smaller payment.

Most mortgages allow 10 per cent a year. Barclays/ Woolwich is good as they let you run an overpayments pot if the overpayment is not more than three times your monthly amount. You can use it back if necessary but you avoid interest on that part.

If you don’t do it now, when will you? Just look for ways to minimise risk with good budgeting and planning.

1.2k is more than I currently have to live on a month, total.

That's a great list @XVGN !!!

I don’t think it’s much although threads like this will always attract people who state they have far less to live on.

I've lived on much less disposable income at times but now have way more than that.

A couple of things to consider. If you have children your current disposable income won’t cover the nursery fees so you need to either increase your income, save heavily or be fortunate to have some free childcare from relatives.

The second point you’ve not mentioned is pension savings. A lot of people are going to end up very poor in retirement and effectively living off benefits. Save as much as you can and make use of the tax relief that’s available. If you stay fit and healthy you will be a long time retired. Aim for a £1m pension pot. That might sound unrealistic but starting young and benefitting from decades of compound interest makes it far more achievable than you might think.

You are taking the piss.

I say this with good intentions: get some perspective. There's a cost of living crisis, food bank use is through the roof (including by people in good paid employment), and you're wondering if A GRAND a month after bills is enough.

I get that if you are used to living off more, you would be unsure about what it looks and feels like going down to less, but come on. Come on. Some perspective about how unbelievably financially fortunate you are right now will help you feel less anxious, because believe me, you are fine.

"I don’t think it’s much although threads like this will always attract people who state they have far less to live on"

You live in the world though right? You went to school? You watch TV? Read newspapers? Interact with people? You clearly use the Internet and have a MN account so you know even if it is not the case for you or for your social circle, that 1.2k disposable income per month for a single person in the UK is not a small amount of money that may be unrealistic to live on and that the majority of the population of the UK and the world would not see that as "not much" and that people stating they have far less to live on are in fact telling the truth and not just "attracted to threads like this" where they lie?

Not buying it. Same as I'm not buying the faux-naivety in the OP.

Yeah, she did. "My take home after NI, tax, student loan and pension is £2,565.". Impressive, but you're right - it'll probably not be enough.

And I should add regarding my list, if anyone says that I should have listed blokes as well as birds, then I'll draw their attention to my Solicitors- non-move fund! 😄

I honestly think you’ll be fine. You’re 27, you’ve taken out a 5 year fixed rate so in that time your wages will go up.

DH and I have £918 left in our joint account after paying all the bills. This then covers our food any any other incidentals during the month. We each personally pay for our own car costs. In my case that's another £100 a month maybe, DH even less as he WFH so doesn't use his car much.

For someone that lives on their own, £1,200 a month is a huge amount of money. What will you be using that for? Food and lifestyle choices? Average it out over a year and it's £276 per week. Even at £100 a week on food, you'll be left with a fair amount.

As you say, your saving won't be at the level it currently is, and that's fine - you're building up equity in bricks and mortar instead.

The only other alternative would have been staying at home for even longer and saving up until you can buy outright, but in the meantime property prices will likely continue to rise.

You've done the right thing and now know not to panic!

You’re posting on the wrong website.

You’re so young and only get one chance to live. I was married with a baby and a mortgage at 27 but now see the 30 year olds I work with travelling the world and flexible to work anywhere and go out whenever. I hope my kids are similar. I’m just getting my life back but holidays are still not fun with teens.

Enjoy the house but enjoy life and don’t rush. Getting out into the world and having new experiences gives you more chance to meet a life partner too. Luckily I moved to London, travelled and enjoyed dating and meeting people before settling down, but I still think it was too young. Don’t let fear hold you back from enjoying life and your money.

Did you even read the OP post it's is £1k disposable enough if she was to go on and have children. Given she hasn't moved out of home and paid all these bills herself it's probably daunting aswell.

I have the same concerns I have same disposable as her and I do wonder if it's enough to cover cost of having a child, I don't think it is personally.

At least she is being sensible and not off having kids and then moaning she can't afford anything

Sorry, I'm not having this. You're indirectly saying I've done this post to boast which is not my intention and not my character. I have no one to talk to about mortgages which is why I've come on here, scouring the internet for some advice. I'm not buying a new handbag here so I've asked to ensure I'm covering all bases and not going into this huge financial commitment blindly. The truth of the matter is I have not lived on just 1.2k, I'm fortunate to not have any huge financial commitments up until this point, so genuinely, I have no idea if the 1.2k is enough to get me by. Would you rather I underestimate the expense of living alone and having little to nothing left?

"Faux naivety"... Are you serious? What would I be getting out of that??

I did, yes. And I too am focusing on the word "realistic". Not "comfortable" or "affluent", but is it realistic to live on over a grand's disposable income after bills. There are large families with working parents who live on less than that, total. And that's not exactly a secret, the huge financial struggles people are going through right now are well documented and talked about.

Op after bills that is a HUGE amount of money a month. Huge!!!

This post shows why adults living at their parents should have to contribute, mine certainly will be once they're working. It gives a totally false idea of what's a normal amount of disposable income. Sorry OP but your post is pretty offensive to most people.

When my two children start working and if they are still living at home, I won’t be charging them rent apart from some contribution towards food and bills. That is my contribution as a parent to help them save up for a deposit. It’s hard enough for young people to get on the property ladder these days. I dread if they have to rent somewhere due to their jobs and pay silly amount as they will never be able to afford a place of their own! I totally understand OP’s post - it’s not offensive at all, she’s young and is nervous about making a huge commitment to buying a property. My husband and I were like that when we bought our first house.

It’s realistic, but as a single person I would be thinking of quickly acquiring the buffer you’ll need, so I would be looking at two bedroom houses or flats. You don’t need a three bedroom house.

And the point OP made is she has no idea thats why she is asking. She doesn't know if it's realistic to live on that amount if having children. I wouldnt know either. So why not come to a parenting forum and ask and get advice 🙄 God forbid someone is trying to be sensible and mature with cones to finances.

You're an above average wage earner. You went to university as you're paying off a student loan.

You've saved for years and are in the uncommon position of being able to buy a house as a single person in their 20s.

You've done all the paperwork to be approved for a mortgage, you understand the repayments, interest rates etc

You use the Internet. You found MN as a forum to gain advice, joined and make articulate posts.

You have low outgoings and have listed all of those.

You presumably, interact with people in RL or at least on the Internet. You stream TV and have access to global news .

And somehow you're asking "How would I manage on just £1.2k disposable per month? So very scary..."

If you've been "scouring the Internet for some advice" and landed on MN, then your "scouring" would have also led you to average bills costs for a single person in a 3 bed home yes?

And you've lived with your parents till now but you go into shops occasionally? You know how much food costs? And know how much you eat?

You've a University educated almost 30 year old. No, I don't believe you when you say you have low living costs, have previously saved your ass off, but are now thinking living on 1.2k a month disposable income is potentially unrealistic or even "scary".