Iām wondering if anyone knows about a rule of thumb on savings and if some live by it?.
Iām currently listening to a audio book on Warren buffetts tips on financial literacy and life(Really enjoying it, Iām amazed that I do alot of what they state automatically and never even knew it)
It states that you should try live by these figures below from your payslip:-
House bills = 30%
Travel to work no more than = 15%
Phone, broadband etc = 2%
Savings at least = 20%
Emergency fund = 5%
For me currently at the state Iām in right now my figures are:-
House bills = 29%(Energy is DD I use more than my spreadsheet so this is actully off so I need to sort how I use my energy)
Travel to work = 4%
Phone, broadband etc = 2.96% (slightly over)
Savings at least = 31.46%
Emergency Fund = 0%
So thatās gave me a knew little task today while working my factory job lol. I also done a search and didnāt really find anyrhing like this so if you care to share yous go a head or if you have any further tips or tricks or of my above figures are wrong tell me.
Thanks people of the free world
P. S I listened back and this budget is supposed to be for a new young person starting in the work force but he also states itās a rough guide as people almost retiring etc would have a different budget than a young 17 year old etc.
My plan is to invest what is roughly 20% of my monthly income.
In reality some months I can afford that, and others, when I have extra bills, perhaps I cannot.
I am good with that, and flexible.
I know that even if I canāt save in a particular month I have a substantial sum going straight from my wages into my public service pensionā¦and thats saving too
Thatās great man to be honest not all that above savings I stated goes directly to investing only 6.34% of that goes to investing then 12.69% to help to buy then 12.41% to a monthly saver top up.
Once the help to buy is complete in November this year and the monthly saver in October, I plan to direct all of it into investing for the foreseeable future.
At least you have goals though that at least points you in the right direction
I also to thought this was really high but then itās an American narrator so maybe this is American travel times?. Iām not to sure about the UK and other countries Iām 20 miles a day to my work.
I can see how the figure may fly up if I used to travel to an old work doing almost 100 miles a day. (This doesnāt even include running costs of the vehicle, oil changes and such)
Also I forgot to add that itās not 15% fuel etc. Itās no more than 15%
I live in NI and even here (in a relative small country) some people pay hundreds a month for rail travel into Belfast from the surrounding smaller towns and villages.
That would be amplified in and around London and in larger countries abroad.
Luckily I live in Belfast and could walk to work if I decide to, but others have less choice, and much more expense.
I lived in London for over 10 years and there is no way I ever hit 20% on travel (well maybe if you include holidays), let alone travel to work.
Now I live in a smaller more centralised city and itās a fairly easy cycle. Iāve spent about Ā£200 on bit repairs and servicing in 5 years. Iāve always made a vaguely conscious effort to live a reasonably cycle-able distance to work though. I apreciate that is harder for lots of people.
Iād estimate that I probably overshoot 2% on phone and internet etc though, which I wouldnāt have in London which has better network coverage so the cheaper options work just as well as the āpremiumā ones.
It was very useful for me a few years ago as money was tight. I basically did something similar to the op - allocated the known bills (council tax, mortgage, utilities, life insurances etc.), set monthly budgets/limits for spends on food, clothing, entertainment etc., added monthly pots for car/house insurance and other annual expenses, and forward projected that 12 months or more ahead to see where the red figures appeared. This approach made a huge difference to my money management and helped me achieve quite a few financial goals.
Iām sure there are other money management programmes available, but the one above is free to use.
Cards are fine as long as you have restraint and willpower, buy stuff then repay it the same night or next night. Thatās what I do anyways I never buy anything with my credit card unless I have money in the bank to pay for it.
Thatās just me tho I always stayed away from credit cards and such as a teen as I knew what I was like, the horror storyās from others helped as well.
Now a days 35 years old have had that credit card since 2017 and have been fine so far, credit rating is near maxed out as well not that I need a loan etc currently but always handy.
Youāre point one, I also do this I have 13 bank accounts currently which are all named so each month I get paid I open the spreadsheet up and I know whatās to get spread into each. Whatever is left in the spare account is the money I can use for that month on anything I want. Of course I could dip into others when needed but I repay them back if I ever do.
You can do even better than that. Iāve been earning rewards on my credit card for many years now, I buy absolutely everything on my card and pay the full balance by direct debit each month. As long as you make sure to stay disciplined with your spending, it works perfectly.
If youāre interested, try the John Lewis Partnership card. You get points for spending everywhere, not just John Lewis. Then when youāve got enough points, that item of furniture or new suitcase or whatever you need is absolutely free!
I have seen others using credit cards with rewards, I donāt yet but prob will at some point thanks for the pointer.
I do use any rewards type points cards on all shopās, nectar, argos, Iceland, lidi, tesco, coop etc etc
I have came from nothing so have had to love on nothing and zero cash before, and even now when comfortable living with just a tad above min wage I still stick to my old guns.
or if you have any further tips or tricks or of my above figures are wrong tell me.
