Apologies for the last couple of days; due to things getting in the way (and me forgetting), I had to rush out the posts. Normal service is resumed from today.
Today, I’m going to discuss my (our) finances. It’s relevant to me right now as we’ve just done our Christmas finance check, and I would like to get it right in my head. This might run over a few posts.
I’ve always been privileged enough to have a good relationship with money. My parents, despite both being self-employed, have always appeared to be fairly comfortable. Personally, I’ve never been the type of person who spends money frivolously, and have always exercised restraint. When I reached my early teens, my parents agreed to give me a monthly allowance (£40/month). This was on the basis that it would cover my needs for food, shopping or outings with friends (but they would cover my lunch money). Soon after, I got a mobile phone, and this number reduced.
But bar the odd cinema trip with my friends, I didn’t often spend that money. I just ended up saving it, and eventually used it to buy the parts for my PC after I’d finished my GCSEs. I’ve never had expensive hobbies or interests, and once I bought my computer, I didn’t often spend anything else.
At one point, my parents realised that they had been filing their self-employment taxes under the wrong category for a few years, so owed HMRC money. They chose to discuss this with me, and I think that was when I learned the value of communicating financial issues as a way of solving them.
The only time I became low on money was after I’d been dating my partner long-distance for a couple of years. I’d take the train to his house every other weekend, which cost me around £40 a month – and as I wasn’t earning money, this meant my savings slowly depleted. Fortunately, soon after the amount got very low, I was able to get a job and move to his parents’ house, so this was no longer a concern.
Once we were living together, our finances were suddenly each other’s problem. We were on good wages, considering our age (19 at the time). Shortly after, we decided to move out. My partner originally wanted to immediately move into purchasing a property, but I talked him out of this, based on the fact that we didn’t know if we could live together independently long-term.
This blog is going to contain advice, simply based on my view that my partner and I are doing it right. When we decided to move out, we went to view some properties and were accepted on a flat we both liked. Once we knew the rent, we sat down, estimated the cost of our council tax, utilities, and groceries. We also set a limit of eating out once a week, and included that cost in our budget. We then opened a joint account and split the total proportionally according to our salaries (which was about 60-40%).
For three months, we just vaguely made sure we stuck to our budget. We deliberately made sure there was room for us to go over, but we ended up not coming close to meeting it. After the three months, we reviewed our spending again, made adjustments to the joint budget, and carried on. At no point were either of us hurting for money.
I’m well aware that this was due to the fact that we had decent salaries, and were both working full time. However, I feel that the fact that we were able to live so comfortably in our first independent home was largely down to our sensible money management and spending. Our rent was well below our combined budget – we could have opted for a more expensive property closer to the centre of town, but we were by no means out of the way, and it meant we could afford something much nicer.
I think tomorrow, I’m going to discuss our savings situation, and how we afforded our first home at 21 years old.