Money Issues

skeg16

Hi,

Not sure if this is the right forum so Mods please feel free to move.

I'm at the beginning of my "life" as such. I have my first job in IT which pays decent for a graduate. I have moved out of home and I am living with my girlfriend for just less than a year. We have a dog and she has a car that we kind of share (I get the bus 5 days a week). I have had 2 cars before but struggled to pay for them as I was still in college and working part-time. We live a decent life style, enjoy our social life and can get by. I don't have any savings to fall back on which is my only worry!

Anywho, I was thinking of buying another car as at the weekends I do be stuck because she has the car for her work.

After doing the budget (rent,car loan,bus food etc..) i will be lucky to have €300 to myself for savings or what not.

Is this common for people? What would be the average monthly bills percentage for most people?
I know my wages might not be great yet but the way I look at it is the more money I earn the more Im taxed!!

I would genuinely be shocked if this was going to be the case for the rest of my life....I mean until im a billionaire and I can wipe my arse with money :pac:

moochers

Hey OP,

300 euro is a very decent disposable income after rent bills etc, so I would think you should be able to afford a car. You could also afford to save fifty euro a week. However, if work is close enough you should think about getting a bike. I cycled for years and it saved me having to fork out on gym membership.

skeg16

moochers wrote: »

Hey OP,

300 euro is a very decent disposable income after rent bills etc, so I would think you should be able to afford a car. You could also afford to save fifty euro a week. However, if work is close enough you should think about getting a bike. I cycled for years and it saved me having to fork out on gym membership.

Thanks. I think Im worried about the fact that at the end of the month im left with less than circa 20% of my wage....would I be mad to live my life like this. I just need to know if this is the normal nowadays!
I live in the midlands and work in Dublin so as much as Id love to cycle to work it would take a fair bit of cycling

moochers

Hey Op,
You're right that would be a long cycle. So you do probably need to get a car.

It's very normal to have 20% of your income left after bills and saving. But I do totally get that you want to have a good social life. You are only young once !

The only thing I would strongly advise you to do is to save a little every week.

LegacyUser

I work in IT, have done for years. In my experience, companies are quite picky now about who they take on, so firstly well done on that.

More importantly, there's just loads of opportunities in IT at the moment - for the right people. Dont know what kind of company you are in, but in my area salaries are good, but you need to maximise your exposure to different technologies, or else specialise and be really really good. From what I know, it is not hard to get a very good salary if you slog for a few years and 'get a good name'.

Tbh I'd focus more on maximising your opportunities to earn more, rather than worrying about what you do with your current salary.

LegacyUser

At the moment you should start to build up your savings in a high interest regular savings account to have as an emergancy fund. This should be 3 to 6 months of your salary. Once you have this amount saved you should put in an an easy access high interest account.

My advice to you is not to buy a car which you will only use at weekends.
If you get a loan to buy a car, tax it, insure it, put petrol or diesel in along with serving/maintance and you will find that you have no spare cash at all.

I know a guy who was in your position a few years ago. He got a car mainly to use to get around at the weekends or for going to his home place. He got a job in another city and sold the car due to the cost of running it.
He saved his money and within a few years he had a deposit saved for to buy his own place.

Once you have your emergancy fund saved you can see what you salary is like then.
After this you might consider starting saving towards a mortgage deposit. If you can show the bank you have saved a good deposit it will help you get a mortage when you are earning a higher salary.
Also as you get older it would be nice to live closer to work espically if you have family.

skeg16

Thanks for the replies all!

I think the morale of the story is to save (something I have never been good at).

Once I find my feet I will start to save and hopefully build up enough to be comfortable....at the moment I am living month to month

My problem is that Im so impatient, I know I need to wait but ive been working in this stable/full time job for over a year and feel I deserve something nice!

Thanks everyone, I think Im just going to save and play the car situation by ear

LegacyUser

moochers wrote: »

Hey OP,

300 euro is a very decent disposable income after rent bills etc, so I would think you should be able to afford a car. You could also afford to save fifty euro a week. However, if work is close enough you should think about getting a bike. I cycled for years and it saved me having to fork out on gym membership.

Is that 300 euro per month or week though? Huge difference.

moochers

I presumed it was 300 a week.

MouseTail

moochers wrote: »

I presumed it was 300 a week.

I took it as per month, he says he has less than 20% of his wage monthly as disposable income.

LegacyUser

Its kind of hard to know if this e300 is "normal" unless you break down what you are spending disposable income-wise (bar rent/general living expenses).

I mean, do you spend a few hundred socialising?

When I was in my hay day (22/23) first job out of college, Id save maybe 30-50 per week. Amass e50 a week over a year and its e2,600. You could buy straightout a car for e1,000. And e1,600 as savings. And build it up again the following year.

Im about 10-12 years older than you (I guess), but by doing that, and any little bit more with wage increases/better jobs over the years (and I assume you will too), Ive saved about e30,000 (and drive a new car I bought out right). The large amount is in a high interest account. And the interest at the end of the year, I spend it or let it accumulate.

Theres no secret or magic formula. I just got into the habit of saving small/what I could and it just all built up over the years. Every year though, no matter what the circumstances, I treat myself to something really nice (like a holiday, or a new pair of good shoes, or a good handbag, or a new laptop). I know some people go off and shop and buy lots of smaller things of less value (and sometimes quality) where as Id put it all towards 1 good thing.

I dont know if that makes sense to you, but thats how I did/do it!

Diziet

A good way to save is to do a realistic budget, decide on a monthly saving target, and then set up a standing order to move that to a savings account on the first of the month. If you wait to see what's left, nothing will be left :-).

It may well be cheaper to rent a car a few tines a year rather than buy, tax, insure and service your own car. Get the numbers on a spreadsheet and see what you think.

The_Conductor

Even on a monthly basis- 300 over after you've covered all your bills, isn't bad going. You can make this go a long way- and providing you're prudent and willing to act in a rational manner- there is no reason that you wouldn't save up for holidays or whatever out of this.

Point of note- the AA website has a cost calculator for the ownership of a car. It comes in on average at around 20k of your NET earnings per annum- all inclusive (tax, insurance, servicing, NCT, petrol/diesel etc etc etc). This is a massive chunk of your net income- if you've budgeted a lower figure- have a rethink- and pop over to the AA website to see for yourself how this 20k figure is gotten at. Obviously if your mileage is lower- your petrol/diesel bill will be lower- but even this might not reduce the annual spend as much as you imagine.

I know you're worried about not having savings etc- you're a recent graduate- you've done very well to get a job- I congratulate you on this- you are going to have to do a realistic budget though- perhaps cutting down on socialising may help your bills a bit- you are going to have to decide how to allocate your finite finances.

MouseTail

I agree, a car will swallow up a lot of that disposable income. If you share the car, can you not contribute something towards the running of that, and have use of it at weekends (drop your gf to work, or she gets the bus and you collect her?) In fact you say you are already paying a car loan, so why would you take another one out?

'I would genuinely be shocked if this was going to be the case for the rest of my life'
It won't be, at the start of your career, things are tight, you are at the bottom of your career ladder. You will get rises, bonuses. It is very prudent to start building a savings pot, but do not be too hard on yourself.

Zen 2nd

What really shook me into saving is when I looked at my P60 at the end of the year and realised how much I had spent as I had no savings at all.

I quickly set up a savings account (very easy to do if you have online banking) and set it to take a certain amount out each month. I'd find it very difficult to save otherwise and I set it to take out of my account on the day I get paid, so it doesn't seem like a big hit.

€300 is a reasonable amount to have at the end of the month. There is ways to boost the amount you save by being careful how your money is spent. For example you could bring packed lunches to work, be careful how you use your electricity and so on and so forth.

If you're thinking of getting a car the three major factors you'll have to think about are insurance, tax and servicing. I had a look at the AA cost table and I can't see where that guy got the €20,000 figure. I'm pretty sure you won't be spending €4,000 on parking.

The great thing about saving is when you've built up a small amount, it drives you to see that figure increase!

Systemic Risk

Hi op with the car this would definately be normal. However one way you could get a bit more disposable income is saving up for the car first and forgetting anout the loan.

I wanted a car but realised a loan of 3k or so would put me below a disposable income level i would be happy with so i saved up and bought a cheap older car. It cost me under a grand but i got it off an acquaintance so i knew it was decent.

Anyway saving is worth considering because i know if i had gotten the loan, which i had confirmed with my credit union, i would probably be finding things a lot tougher and it sounds like im in a broadly similar financial situation to you.

Xidu

For someone who has no kids, I think you should try to save more than 20% of your income. If you want to buy a house and start a family in the next 10 years. But, some people say you should enjoy your life as life is short.

Cork selfbuild

Hi OP,

For a graduate 20% isn't bad, but you would want to increase savings as your wages increase over time if buying a house / travelling / having a rainy day fund are something in your long term plan.

Getting into a good personal financial management is a great way to stay in control and you seem to be looking at things this way so keep it up and it'll stand to you.

A car for me was critical when growing up and you can still do it...

Have a look at the Bangernomics Thread over in the Motors section, these guys post up cheap cars and chat about them and would be happy to advise you..

skeg16

Thanks everyone,

Reading all the replies I think it is very clear that I may start saving!! If I am going to progress with buying a car I think it will have to be a right banger

I have entered the big bad world and I have have come to the realization that Biggy Smalls is right when he says "mo' money, mo' problems"

Wish me luck, Thanks