How I Live On a £69,500 salary while saving to buy a two-bedroom flat In our money series we’re finding out exactly how people in the UK spend, save and invest their incomes to […]

In our money series we’re finding out exactly how people in the UK spend, save and invest their incomes to meet their costs and achieve their goals.

This week we speak to 29-year-old Kate Smith*, a project manager on a high salary who was still inspired to make changes to her spending habits to save for a housing deposit in London.

Monthly income: £4,003 net salary (£69,000 gross annual)

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Regular monthly outgoings:

Rent and bills: £830

Pension contributions: £264.25

Travel: £110 (averaged from annual travelcard)

Mobile phone contract: £10

Sports club: £40

Food shopping: £350

Holidays: £375

Savings target: £1,500

Total: £3,479.25

Amount left to spend: £523.75 / £121 per week

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“I’ve been a project manager at a construction company for over three years and I’m involved in a lot of new build projects, which got me thinking more about buying my own place sooner rather than later.

I’ve been saving £1,500 a month for almost a year to put towards a housing deposit. I used to save around £800 per month but then stepped it up a notch to get a deposit together faster.

Saving £1,500 a month

When I started saving, I spoke to a mortgage broker who said I would be able to borrow £320,000, based on my salary. I knew I wanted to buy something for around £380,000, so based on that I worked out that I needed at least £60,000 for a deposit.

With what I already had saved, it meant I needed to be saving £1,500 a month in order to buy at the beginning of next year. This felt like a stretch, but doable.

The first thing I did was move out of my old house share into a cheaper one, saving around £50 per month. Then I cancelled my gym membership, which was very expensive at £150 per month as it was in Central London near work, and started going running instead. I still play touch rugby on Saturdays, which is £10 per game.

I’ve also reduced how often I take taxis. Now, when I do take one, I link it to a specific credit card so I can track how much I spend per month. It really showed me how much I was spending on taxis.

I won’t give up travelling

I also made sure I have a good credit card for overseas spending so I don’t get stung for fees, as the one thing I do spend money on is weekend trips abroad. I always buy the cheapest flights, though, and I watch what I’m spending – if it’s an expensive place, I won’t drink alcohol.

I bought my travelcard for the year up-front, but it works out to be £110 per month. Now I save the £110 I would usually spend on travel, transferring it into my savings account when I get paid. Buying an annual pass meant I also saved an extra £20 per month.

I spend around £80 per week on food shopping. I cook vegetarian and do lots of meal preparation, including making all my lunches for work. I found it was a lot cheaper to fill out my meals with chickpeas and lentils and then occasionally eat meat on weekends.

I spend around £100 per week on eating out and socialising, which I’ve cut down. I order less when I’m out now: in the pub I’ll have two drinks and then drink water, and on a day out I’ll get food from a street market rather than pay for a pub lunch, which means I pay £7 rather than £16.

For me it’s been about cutting out random stuff. I avidly read the book Barefoot Investor and watched a Netflix documentary called “Minimalism”. Both really changed my thinking when it comes to buying things that I don’t need.

Closer to my target

Recently I was going to buy a red jacket, but then I thought: “I don’t need a red jacket, I’ve got a navy one and it’s fine.” So I’ve changed my train of thought about what I really need to spend money on.

By doing that I’ve been able to save even more than my target. The past two months I’ve saved an extra £200, by transferring out what I have left in my current account to my savings account at the end of each month.

I’m really close to my target now and excited about getting my own place. I live in Bethnal Green in East London and I’m hoping to buy a two-bedroom place near here, but I think I might have to settle for a one bedroom – it depends on the market.”

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– *Name has been changed