UK Bachelor with a Bachelors - Where to start?

[McBenthy]

Hey Mustacians!

I'm a huge fan of the blog and am working on curbing my lifestyle to suit the FI dream.

A quick bio of myself:
26 next week
BSc(Hons) in Chem
4 years working in science
Past 2 years doing a part-time postgrad qualification through work
Single
Live in the city I work in, but my main social groups are outside this city

I want a harsh critique of my lifestyle/budget to try and push me towards fixing it. I've made some (baby) steps but want more!

Below is the spending of Sept - Nov averaged to give an idea as to my budget. There are some large expenses that are due to circumstance (holiday with the gf, weekend mess up after breaking up with the gf :P ) but I suspect these large extravagances would occur in one way or another.

'Fun': £488.90
- 'Gaming' - £14.50
- 'Hobby' - £41.86
- 'Climbing' - £34.73
- 'Travel' - £208.67
- 'Partying' - £104.69
- 'Eating Out' - £84.45

'Monthly Expenses' - £771.85
- 'Rent' - £410
- 'Phone' - £31.85
- 'Internet' - £25.40
- 'TV' - £5.99
- 'Electricity' - £72.33
- 'Water' - £31.90
- 'Gas' - £25.00
- 'Account Interest' - £72.42 (we'll be coming back to this, I promise you!!!)
- 'Council Tax' - £96.96 (actuality it's closer to £75, but i paid 2 months in sept, and 2 months in nov)

'Everyday Expenses' - £416.32
- 'Groceries' - £205.56
- 'Fuel' - £54.67 (a lot of the actual fuel cost is up above in travel because it was road trips and therefore fun money, not commuting around - so this is much higher than it needs to be!)
- 'Spending Money' - £79.42 (not got a good way of tracking cash :( )
- 'Clothing - £34.96 (still buying all the items that I need as BIFL so this is a pair of jeans every 6 months, a decent suit every year etc)
- 'Household Goods' - £31.72 (same as before - this was a crockpot and a decent iron skillet. One off expenses that are long term use)
- 'Account Fees' - £9.97 (Lloyds Silver acc - breakdown cover and travel insurance which I use for multiple france climbing trips)

'Rainy Day Funds' - £58.99 ( bad category name by YNAB there)
- 'Car repairs' - £11.83
- 'Birthdays' - £47.16

'Savings Goals' - £92.40
- 'Car Insurance' - £32.40 (monthly cost - paying in full at renewal)
- 'Car Tax' - £60.00 (annual cost £180 - paid in Sept)

Total - £1,828.47

This is distressingly above my average income for the period (£1,652.17)

Some obvious cuts are already being made - my social life is on a serious crackdown. I'm only going to make 1 visit per month to see friends. I could cut this down to 0, but I don't think I'd survive or thrive without seeing friends or family at least once a month! Other cuts in the 'fun' category such as eating out are also being curbed, but not aggressively enough. The major push back on these is that as a bachelor, I want to be dating and meeting people. 2nd date onwards is cheap, but with my social group being 50 miles away, most 1st dates involve a £20 travel cost...

Regarding the account interest - yes, it's disgusting. Yes it keeps me up. Yes I'm paying it down (although not through sept-Nov apparently...) but the total drop has only been £550 over 5 months - this needs improving!!

Whilst I feel my rent is acceptable (1 bed flat near work), the electric bills are killing me! Any tips?

Are there any other sections that you guys can highlight for me to attack? Any tips? A major weakness for me is paypal and just-eat :( Well, that and expensive nights out in Manchester and Liverpool...

As for a view on assets I have:
My car - '07 hatchback, 93k miles - no loan or similar
My idiot card - near enough £4k debt
interest free student overdraft - £1,756
A maternal loan - £800
This gives me a stonking -£6,349.88 worth.

I need to fix it.

[esprit-de-lescalier]

Hi McBenthy,
Welcome to the Forums. Another UK'er here.

It sounds like you already know where you can cut back and what to do about it. You need to "run around like your hair is on fire" until your debt is paid off first. Then ensure you don't get back into debt. As far as you can you need to wipe out your "fun" category completely. This is where your easy gains will be. It looks like there is plenty to be had in your "Monthly Expenses" category too: 'Phone' - £31.85 for example looks like an expensive contract phone, don't renew your contract and run SIM only as soon as you can with the handset you have. Electricity seems high, I don't pay this for a 3 bedroom house with a family of 4. I'm not sure what 'Account Interest' is, but it looks like it is interest on a loan or overdraft? (See hair on fire, above). The rest doesn't look too unreasonable, but there are still gains to be had depending on how far along towards the ERE end of the spectrum you want to take it. Work our your saving rate and look it up on the saving rate table, then decide where you want to be and how long you want to work for.

On the massive plus side, congratulations on only being 26! You have the most important thing going in your favour - time. Compound interest is your friend, once your debts are paid off, get saving. Open a SIPP or ISA depending on your plans, and make your money work for you. Read lots, here on MMM and ERE and Monevator.

Good luck!

Gordon

[Phil_Moore]

Welcome!!

I'm sure there's someone much more qualified than me to go through the line-by-line, there's definitely a lot of fat in there (e.g. I've got unlimited mins/texts on Virgin mobile for £8pm so assume you've got a very flashy phone on credit for £30pm), but at first glance there were a couple of things that jumped out at me:

1. Your salary is £25k gross?  Maybe I'm biased by the industry I work in but that seems very low for a chem graduate 4 years deep in a career. Will the postgrad qualification open up more lucrative opportunities?

2. You're spending ~£600 a month on fun when you owe your mum money? Nah mate, I would cut everything to zero until I'd paid that off.

3.  Not sure where you are in the UK, I've lived in a few places and never needed a car except way out in the sticks, if you live in the city close to work do you really need it? We have all this public transport and a car's a large expense.

[McBenthy]

Cheers for the replies.

The phone is indeed a flashy smart phone, still a year left on contract, then I'll be switching to SIM only.

I agree my pay is pretty terrible - I'm looking at new jobs as a result. I'm based ins toke and keep being told it's high for the area, to which I respond with salary surveys from Monster and New Scientist saying that the average for my role is £34k :-( The balance I'm striking is whether to stick it out for a PhD (4 years shite pay), or bounce to a new role.

Regarding the car, I'm in Stafford but my main activity is climbing in the peaks - I need a car for carrying the mats. On top of this my mum lives out in the middle of nowhere. I agree the car isn't cheap, but at a grand total of £680 (insurance, tax + service) it allows me trips that cost either a LOT more by public transport, or aren't doable by public transport.

Regarding the money I owe my mum - this is a bit of a messy situation. I currently have a £6,500 loan in my name for her as a result of an arsehole dad situation. She's happy to let the money ride as long as is needed - although obviously, I should be putting the £600 into my interest accruing debts...

[NewbieFrugalUK]

So, let me see if I have this straight: you live and work in Stoke (hence cheap rent but low pay ) but spend most of your free time in the Peaks/ Manchester etc. Where does your mum live? Sounds like a recipe for get a job in Sheffield (hopefully for higher pay but keep the cheap rent?)
Before you do the PhD do check with as many people as you can find that it really will translate to higher pay at the end of it - I don't know much about your field but I have seen people work their arses off doing PhD s only to be told they are now overqualified for the roles they want!
Definitely second the point about being 26 - you have 'seen the light' nice and early. :)

[McBenthy]

Hi NewbieFrugal.

My mum is over towards Lincoln so Sheffield would clearly be ideal. The rent is cheap-ish. I actually paid less in Manc because of house-sharing, but could happily find a place for a similar price there solo.

I am currently doing the PhD - it's part-time through my job. Basically I do science day-to-day and I get some extra time to do extra science to submit as a thesis. It has its upside (paid job, company picks up the tuition), and its downsides (constantly busy - evenings and weekends are not mine to plan).

The problem with seeing the light early is that I'm still young enough that 15 years seems half a lifetime :P

[esprit-de-lescalier]

A paid off car that is cheap to run can be cheaper than public transport, but it's important to keep track of your expenses so you KNOW how much you are spending. Have a look at money dashboard, very handy web site that tracks your expenses for you.

[Phil_Moore]

Regarding the money I owe my mum - this is a bit of a messy situation. I currently have a £6,500 loan in my name for her as a result of an arsehole dad situation. She's happy to let the money ride as long as is needed - although obviously, I should be putting the £600 into my interest accruing debts...

That doesn't sound ideal. Ignore me then, as you say, just treat it as regular "hair on fire" situation then.

Without knowing the value of the PhD it is a hard call, will it likely pay off the £40k+ (?) in missed earnings and the time spent on it?  Will other companies pay you more *and* help you with it? etc. Is your surname Love or Doom? There are many key concerns.

On the car, your priorities are your own, but the £680 (+ depreciation?) is a large chunk of your £2k overspend...there may be a wants vs. needs conversation to be had overall between hobbies/friends/climbing/paying off debt etc.

But as others have said, you've got plenty of time to square it all away.

[McBenthy]

The car costs of £680 aren't exactly small - but the replacement costs of public transport run higher - at least they did when I ran the numbers a few years ago.

Regarding the PhD - this is my consideration. I doubt it - the response though is that it opens up academia as a career which is a nice semi-retirement option for 20 years time when I'm ready to quit the rat race (Note: I'm not suggesting Academia is easy - in fact its long hours, mediocre pay, and tough - but it is super rewarding imo) - Obviously this is an ongoing question for me, though I have a few irons in the fire.