(warning: long budgety scribble heavily influenced by Excel)
Money’s not yet too tight to mention, but the UK budget announcements on Wednesday may tip the balance for many people . The average UK salary is near £26,000 per annum. I’m lucky enough to earn more than average, a ‘middling’ salary that helps me support my 1st luxury of living alone in a house that demonstrates my detachment. My purchase-ability has been steadily dropping since returning to England in 2007. My expenses have also steadily dropped. I am lucky enough to be able to live within my means, and like most people, my means are systematically shrinking
Once my salary has gotten into my bank account this is approximately how it leaves:
50% on home mortgage and insurances
My 4th mortgage. Each home more gorgeous than the last. This upscaling is why, after 20 years, I still only own half of my home. Some friends have repaid their mortgages because they’ve lived in one house for a long time. In Reading town I’m primarily paying a premium for living near a station with a 25 minute one-stop commuter ride to London. Spending this money is both a ‘basic’ because I need a home and a luxury because I could rent, or live further from London, in a place that would only take 25% of my salary. Being able to choose to live here and invest in ‘property’ makes me feel like I am a rich person
6% on home services
Water rates, electricity, gas, council tax for local services like rubbish disposal, police etc
12% on home maintenance and improvements
Replacing broken equipment (e.g. washing machine) paying for plumbers, electricians, roofers, cleaning equipment, painting equipment and plants
12% on transport
Being able to travel any way other than on foot feels like a luxury. My 2nd big luxury expense is tanking Thomas for petrol, insurance, servicing and parts. Some money goes on public transport for holiday journeys like my train ride down to St. Ives at Christmas
10% on health, food and appearance
Toast, marmite, tea, socks, pants, shampoo etc The stuff that makes up most of my weekly shops
10% on entertainment, friends and family – mainly eating and drinking
YAY! My 3rd luxury – a fabulous regular expense that brings me a lot of happiness….
0% on savings
Um never really managed to save. I have managed to get ‘Savings’ this happened when I started jobs that paid ‘Bonuses‘ for good performance – in 2000. This amount is nothing like the size of Bankers bonus! Normally, It could cover the cost of an extra pint of beer a week.
Before my salary gets to my bank account a lot is deducted in tax and:
20% on pension
I got my first job after completing my PhD in 1991. Having missed years of making pension contributions, which meant I had some catching up to do. I started by contributing 15% of my salary to my pension in1991. As pensions have become less reliable and effective saving schemes, I’ve increased my contribution to 20%
What do you do? How do families with only one income cope? How do couples use the extra income that joint expenses release? How can families earning less than average income afford to provide for children?
How will the budget affect you?