Living with parents equivalent to earning another £17k

122025278

I think living with your parents is equivalent to earning AT LEAST another £17k (Assuming you're a basic rate tax payer, who pays national insurance contributions and contributes a small amount towards a pension scheme)

Monthly costs:
Rent/Mortgage: ~£450/~£600 (£600 based on a 25 year mortgage of £130k, less than half the national average price, at low interest rates)
Council tax: £80 (About average for a property in the £130k region, with a working occupant who gets the 25% discount)
Electricity and Gas: £60 (Probably less than most people would use if anything, especially in cold months)
TV licence: £12
Phone and Broadband: £18 line rental + £17 for call and internet package = £35
Home insurance: £25 ( Bank would certainly insist on building insurance)
Water: £25
Maintenance: £50 (Covering appliances and fixtures and fittings)

Total: £887 a month

How much you'd need to earn a year working full time on the minimum wage to have £887 a month after tax: £17000, meaning you'd need to earn £32k a year.

I think I have been very conservative if anything and underestimated. The £130k house price was factored in for a first time buyer, a more expensive mortgage would mean higher repayments obviously. £50 a month may cover maintenance, barely, but I also haven't factored in the cost of new equipment, appliances and furnishings (TVs, fridges, beds, DIY) these tend to be paid off over a period of time or saved up for, monthly, so in reality this would be in the low hundreds a month. Economies of scale can be made by buying as a couple, but couples tend to buy larger homes meaning higher mortgage payments, higher utility costs etc. so the cost is by no means halved.

Of course many people contribute towards living with their parents/family when they're working especially as they get older, but nowhere near £900 a month. I also haven't factored in food costs, as some people still eat their parents food or benefit from the economies by buying together, so this could save them £100 a month at least.

Do people agree with my costings?

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Reply 1

TheArtofProtest

Have you factored in opportunity costs for sex?

Reply 2

Carrot_Cake_13

Your red gems look so beautiful :biggrin:

Reply 3

unknown113

wtf £12 tv licence? it's £145! not 12.

Reply 4

SophieSmall

Original post by unknown113

wtf £12 tv licence? it's £145! not 12.

they've done monthly cost, not yearly :tongue:

Reply 5

SophieSmall

Some of your costings may be off depending on area and whether people are sharing the property they rent/ own. And some of your costs don't add up.

But it's no secret that living with parents saves you money. Only difference is many people would rather spend money so as to have their own home, freedom and privacy. Sure moving out isn't exactly the smartest financial choice, but for some people it's the right choice for them.

(edited 8 years ago)

Reply 6

122025278

Original post by TheArtofProtest

Have you factored in opportunity costs for sex?

Haha!

Reply 7

username1560589

Who gets a TV license?
What does the £35 for phone and broadband cover? If it includes a landline phone you don't need that.

It does seem like a lot, but you are considering a propery of £130000 so things could scale down a lot.

red gems *__*

Original post by z33

red gems *__*

so did you watch deadpool by yourself then?

im thinking on embarking the same journey however fears of seeing people i know and explaining myself are holding me back :laugh:

Reply 10

CAElite

Have you factored in the potential loss of earnings caused by the court proceedings following the murder of 1 or more of the family members you live with? It's bound to happen eventually.

Reply 11

z33

Original post by Shadez

so did you watch deadpool by yourself then?

im thinking on embarking the same journey however fears of seeing people i know and explaining myself are holding me back :laugh:

yupp!! it was AWESOME :biggrin:

no one even looked at me lmaooo x'D
just be like "the person who came with me didn't have their ID and had to watch something else"

or go to a cinema not near school/ where everyone lives x'D
i recommend it more than going with friends :wink:

Reply 12

shaymarriott

Original post by 122025278

How much you'd need to earn a year working full time on the minimum wage to have £887 a month after tax: £17000, meaning you'd need to earn £32k a year.

This is a nonsense sentence.

Are you saying working full time on minimum wage? Or working full time on 17k?

£17k salary would give you 1220ish after tax/NI...

I think you need to go away, work everything out again, and come back when you've got it right.

It doesn't cost 17k (or the after tax equivalent) to live alone.

Posted from TSR Mobile

Reply 13

Tiger Rag

Original post by shaymarriott

It doesn't cost 17k (or the after tax equivalent) to live alone.
Posted from TSR Mobile

Indeed it doesn't. My home insurance, for example, cost me about £154 for the year. I certainly don't pay £50 a month for maintenance either. Have only had to replace a light bulb (which cost a few pounds) since moving in a year ago.

(edited 8 years ago)

Reply 14

NX172

Original post by 122025278

I think living with your parents is equivalent to earning AT LEAST another £17k

I think 17k is a bit of a stretch but when I was working my first job at ~25k I suppose it would've been possible to save this much with minimal spending, although things like daily lunch would make this figure lower. It was this way that I managed to save enough for a house deposit within a year and a half.

Reply 15

Ljayne89

How does £887 = £17 a year? And if you had a salary of £32k a year your take home would be considerably more than £17k... Now for the calculations!

We are all entitled to a tax free allowance each year, this currently stands at £10,600. So this means the first £10,600 you earn you do not pay any paye on. To calculate that tax (at 20% for the first £31,785) you would do the following £32,000 - £10,600 = £21,400 x 20% = £4280.
For national insurance: you pay national insurance on any income above £8,060 so for this we would do the following £32,000 - £8,060 = £23,940 x 12% = £2,872 ...
So your yearly net salary would be...
£32,000 - £4,280 - £2,782 = £24,938
Monthly this equates to £2,078.. a lot more than £887!

For your calculation you need to do the following -

£887 x 12 months = £10,644 a year
this is £44 over the tax free allowance so you would expect to pay tax and NI on £44 of this - not really worth worrying about!

Reply 16

122025278

Original post by Ljayne89

Your post was a complete straw man.

The £887 comes from the cost that a person saves, each month, from living with their parents (assuming negligible contributions). I was very conservative in my calculations too. Ergo, a person would need to come up with £887 a month to cover fairly modest living costs. To come up with an extra £887 a month, a basic rate tax payer who makes national insurance contributions would need to earn an extra £17k a year before tax, without doubt.

What I was trying to show was that someone on the minimum wage of £15k a year living with a parent has the same standard of living as someone earning £32k a year, with a very modest house (circa £130k value, less than half the national average price).

Reply 17

Sciatic

It's better for the economy of any country, if people spend more on these things. I don't know nothing economics tho

Reply 18

122025278

Original post by shaymarriott

You don't get it, perhaps it's too nuanced for you.

I'm talking about comparing someone who lives with a parent and works full time on the minumum wage earning £15k a year and the earnings that a person who has their own modest house (circa £130k), possible first time buyer, would need to have the same spending money as that person on the minimum wage living with mum.

Imagine two people. They both earn say for example £30k a year. Assume for arguments sake none of them claim any benefits. Person A is single. Person B has 3 children and a partner, the partner does not work. Person B has much more outgoings than person A by virtue of the 3 people their salary supports. Person B would probably need to earn around £50k-£60k to have the same level of spending money as single person A with no dependents. This is what I'm getting at.