London AN1 Budget - Realistic?
Hi all,
I'll be starting my graduate job in July and I'll be lucky enough to live at home, but I'll still be helping out a bit anyway.
To start: I have a medium-term goal to save around 80 - 100k in the next 3 years to buy an apartment in my home country (Nordics). I will also be opting out of pension contributions and I have a student loan.
After tax I will have £3940 or something in that ballpark.
Minus £1500 which I'll be giving to my mother as "rent".
Minus £1500 into savings.
Leaves me with around £940
If I have lunch at the office twice a week (I'll bring lunch from home other days), assuming £15 for lunch, then 15x2x4 which is £120
Which leaves me with £820
Then I have my misc bills which is around £151 so after that:
£669
Travel to and fro work maybe like £8 or so a day, so 8x4x4 (WFH Friday as per group culture): £128, leaving:
£541
From that £541 I can put away some £350 as "discretionary spending", so:
£191 left over, which I can have as a bit of a cushion.
How does this sound? Obviously from living at home I'll have some luxuries as not having to worry about a weekly shop etc.
Yeah this effectively my budget except lunch should really only cost £8-10 or even cheaper if you're less fussy about what you eat, so gives you some more breathing room.
Saving 80-100k sounds very achievable based on my back of napkin maths assuming expenses. Don't change. All I'd say is ~4k a year is not a huge amount for discretionary spending. I mean last year I spent almost that on just holidays.
Thanks for the answer! I only put £15 for lunch as a top-end estimate for "breathing room", not intending to spend that much in practice.
Recognise that discretionary spending is not the highest, but I figure that I can sacrifice a bit for three years or so if it means I can buy an apartment at home in cash or like <20% LTV, rather than be very loose with finances.
Fair. From a financial perspective it rarely makes sense to actually buy a home in all cash though.
1. You lose access to all leveraged appreciation.
2. Mortgages interest is often lower than stock market returns in the long-run.
That said, some people don't like debt, so do you.
It's mostly because the banks back home have very strict AML and are very unwilling to lend unless the money is earned and taxed there. But I'll see what I can do.
What kinda mansion are you living in that you have to pay £1500 in rent to your own mother
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