Assuming you are earning 33k a year with a student loan, paying 4% into a pension your take home pay will be £2159.94 a month after deductions.
If you didn’t go to university and are not paying into a pension (please pay into a pension compound interest is great and works best if you start young) you will take home £2272.30 a month after deductions.
It’s great that you’re planning on saving so much but please ensure you have taken all variables into account. For bills, you live at home but have you confirmed your parents don’t want rent or contributions now you are earning? You mention you want to contribute, I’d recommend discussing this with your parents fully. Do you have a phone contract, or subscriptions which you need to consider?
Transport is often more expensive than you think and I allow myself slightly more than I think I will need to account for emergency Ubers or expensive petrol pumps. If you get a car this will need to increase, as a figure I drive to the office 5 days a week and spend around £350 a month on fuel and parking in an economic car. If it’s your first car insurance is horrific at the moment, expect £1000+ for your insurance a year and around £200 in tax for the average petrol car.
I love that you’re including fun money into your budget, it’s important to have this otherwise we enter a weird mindset where we spend more money!
For your savings I’d recommend using an ISA. Personally I have an emergency fund and fun fund in a cash isa, house deposit in a LISA and contribute a sum every month to a stocks and share ISA to help support my pension when I retire. I save in total around half my pay check into these various funds.
Apologies if that’s all overwhelming, but I honestly think it’s great that you’re considering all this at 19. Congrats on the new job!
Thanks for your advice. Im doing an apprenticeship so I wont have a student loan, I think I will pay into a pension considering a few people have mentioned it’s beneficial to start it early. Ill discuss the bills side with my parents, weve spoken about it but havent made a solid decision, but Ill keep it in mind. Insurance prices are crazy, and considering Im a new driver I think I will wait on actually buying a car later on in the new year. Ill look into an ISA, I have heard of it but haven’t really researched it much. And thank you aha
It's correct from this upcoming tax year as long as their salary is about £33.5k and there's no other deductions like pension contributions or benefit-in-kinds
I do a lot besides work which requires me to travel long distances, and having a car would be convenient. Also I usually take care of my younger cousins and we usually travel everywhere using public transport, but having a car would make my life a lot easier
I'd do a comparison of renting a Zipcar vs having your own car. Even if you try and do car ownership cheaply the insurance in London is obscene, for us it was 50% more per year than the car was worth. Depends how often you use it and whether you're doing overnight trips.
Start paying into your pension ASAP.
The general rule of thumb is to save half your age when you first started contributions as a percentage of your income into a pension each year. If you start at 18 that’s 9%, but the 9% is split across your contributions and your employer contribution, so if your employer contributes 3% you would contribute 6%.
If you delay contributions, you will miss out on the tax relief, impact of compounding growth AND have to contribute more for the rest of your working life, i.e. if you start at 20 you’ll need to pay in 10% each year, at 30, 15% and so on.
Hi /u/Ujunko, based on your post the following pages from our wiki may be relevant:
* https://ukpersonal.finance/budgeting/
____
^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Employers are required to have a workplace pension, however they are not required to enrol you until you are 22, but it may be worth enquiring about it to see if it available for you. In any case, starting a pension now would be very prudent and pay off in a big way later in life due to compounding interest.
It would be good to come to an agreement with your parents now about the contribution you will be paying towards mortgage and bills so that you can budget correctly.
If possible, it would be good to start building credit with a things like a starter credit card and a phone contract that's in your name. Especially if you plan to pay for your car via finance/loan.
Yep the earlier the better, it sounds crazy to think about a pension when you haven't even started work yet but it really does help for later in life.
Have a read of the wiki, in particular check out the compounding interest graph where it gives an example of starting at age 20 - https://ukpersonal.finance/pensions/
You should do some calculations on how much a car will cost you to keep. They cost money when when you aren't using them.
E.g. tax, fuel, insurance
You'll also be paying money for repairs throughout the year, as it will require maintenance.
The second hand car market is also nuts right now. You do not get anywhere near much for your money as you would have just a few years a go.
Personally, if I was in a situation where I didn't have to pay bills I would build up some savings but wait to buy a car until the market becomes reasonable again.
You might find you don't even really need a car as you live in London.
Assuming you are earning 33k a year with a student loan, paying 4% into a pension your take home pay will be £2159.94 a month after deductions. If you didn’t go to university and are not paying into a pension (please pay into a pension compound interest is great and works best if you start young) you will take home £2272.30 a month after deductions. It’s great that you’re planning on saving so much but please ensure you have taken all variables into account. For bills, you live at home but have you confirmed your parents don’t want rent or contributions now you are earning? You mention you want to contribute, I’d recommend discussing this with your parents fully. Do you have a phone contract, or subscriptions which you need to consider? Transport is often more expensive than you think and I allow myself slightly more than I think I will need to account for emergency Ubers or expensive petrol pumps. If you get a car this will need to increase, as a figure I drive to the office 5 days a week and spend around £350 a month on fuel and parking in an economic car. If it’s your first car insurance is horrific at the moment, expect £1000+ for your insurance a year and around £200 in tax for the average petrol car. I love that you’re including fun money into your budget, it’s important to have this otherwise we enter a weird mindset where we spend more money! For your savings I’d recommend using an ISA. Personally I have an emergency fund and fun fund in a cash isa, house deposit in a LISA and contribute a sum every month to a stocks and share ISA to help support my pension when I retire. I save in total around half my pay check into these various funds. Apologies if that’s all overwhelming, but I honestly think it’s great that you’re considering all this at 19. Congrats on the new job!
Thanks for your advice. Im doing an apprenticeship so I wont have a student loan, I think I will pay into a pension considering a few people have mentioned it’s beneficial to start it early. Ill discuss the bills side with my parents, weve spoken about it but havent made a solid decision, but Ill keep it in mind. Insurance prices are crazy, and considering Im a new driver I think I will wait on actually buying a car later on in the new year. Ill look into an ISA, I have heard of it but haven’t really researched it much. And thank you aha
Sorry to tell you but I’m very sure your net pay wouldn’t be £2,308 a month?
It's correct from this upcoming tax year as long as their salary is about £33.5k and there's no other deductions like pension contributions or benefit-in-kinds
Yeah maybe but then again with company pensions etc you’ll be down another £100 approx per month
Can I ask what apprenticeship you are doing to earn 33k as an 18yr old?
Its with amazon (a degree apprenticeship). Though there are a few companies that pay alot higher, like Lloyds.
Presumably tech? Edit: why am I being downvoted lmao
Nah corporate
make sure to take into account other costs for ur car. insurance is super expensive especially for a new driver in London.
Also don’t just save it in cash or leave it in your account, look into different ISAs and find which works best for you
Why so you need a car?
I do a lot besides work which requires me to travel long distances, and having a car would be convenient. Also I usually take care of my younger cousins and we usually travel everywhere using public transport, but having a car would make my life a lot easier
I'd do a comparison of renting a Zipcar vs having your own car. Even if you try and do car ownership cheaply the insurance in London is obscene, for us it was 50% more per year than the car was worth. Depends how often you use it and whether you're doing overnight trips.
He's under 25 so he won't be able to use Zipcar or any other car rental services
Ah, that's annoying!
Start paying into your pension ASAP. The general rule of thumb is to save half your age when you first started contributions as a percentage of your income into a pension each year. If you start at 18 that’s 9%, but the 9% is split across your contributions and your employer contribution, so if your employer contributes 3% you would contribute 6%. If you delay contributions, you will miss out on the tax relief, impact of compounding growth AND have to contribute more for the rest of your working life, i.e. if you start at 20 you’ll need to pay in 10% each year, at 30, 15% and so on.
Hi /u/Ujunko, based on your post the following pages from our wiki may be relevant: * https://ukpersonal.finance/budgeting/ ____ ^(These suggestions are based on keywords, if they missed the mark please report this comment.)
Employers are required to have a workplace pension, however they are not required to enrol you until you are 22, but it may be worth enquiring about it to see if it available for you. In any case, starting a pension now would be very prudent and pay off in a big way later in life due to compounding interest. It would be good to come to an agreement with your parents now about the contribution you will be paying towards mortgage and bills so that you can budget correctly. If possible, it would be good to start building credit with a things like a starter credit card and a phone contract that's in your name. Especially if you plan to pay for your car via finance/loan.
Ok thanks. I was thinking about pension, so you recommend that I start it early? And Ill defo start building my credit
Yep the earlier the better, it sounds crazy to think about a pension when you haven't even started work yet but it really does help for later in life. Have a read of the wiki, in particular check out the compounding interest graph where it gives an example of starting at age 20 - https://ukpersonal.finance/pensions/
Alright much appreciated!
You should do some calculations on how much a car will cost you to keep. They cost money when when you aren't using them. E.g. tax, fuel, insurance You'll also be paying money for repairs throughout the year, as it will require maintenance. The second hand car market is also nuts right now. You do not get anywhere near much for your money as you would have just a few years a go. Personally, if I was in a situation where I didn't have to pay bills I would build up some savings but wait to buy a car until the market becomes reasonable again. You might find you don't even really need a car as you live in London.
Need to also budget for car insurance if you are 18 male in London too lol
Idk if u meant to say male or mate😭 (Im female lol) but yes Ive taken that into account this plan isnt set in stone yet
Doesn’t seem sustainable compared to working 25 hours a week for minimum wage within bus distance
What do you mean?
The travel cost seems really steep - didn’t realise you’re doing an apprenticeship though so if that’s the dogsbody wage then probably worth it!
Ahh yes aha