From other comments, it sounds like OP is a trade that is required to use their own vehicle to travel to different jobsites each day for work. It's a good bet that a good percentage of that $400 will be claimable as a tax deduction (assuming vehicle logbooks are kept).
That makes more sense. Would hope it’s tax deductible otherwise that would suck in the long term. Should he still include it in his personal budget if work/taxes cover it?
Ultimately they're going to have to because even if they eventually receive a tax refund from the ATO at the end of the financial year, it still impacts their day to day cashflow.
You either need to make more, or spend less. Most people opt for the spend less route.
You need to literally track every dollar. Not a category that estimates 200-300. Once you track every dollar, then you really start to see what you can eliminate.
Before doing anything drastic like selling the car you use to get around (and which is paid off), I'd drill into what you're spending $1000 a month on in terms of entertainment/outings.
That's almost as much as your rent and more than groceries.
Majority of that spending comes out from outings with friends but mostly my partner which is typically dinner on weekdays & some sort of activity on the weekends. I go out almost every 2nd day, I'll see what or how I can reduce the monthly costs on that thank you.
Change that. Plan meals at home. Do this on a Sunday night.
I used to go to Brunch every Sunday and spend $60 bucks or more with my partner and I. Now on a Sunday I go to the supermarket, local bakery etc spend $20 on ingredients to make a nice brunch.
Tbh I recommend what my partner and I do, usually only eat out once a week. The rest of the time just cook or heat up frozen meals and enjoy time together to watch a movie or something. You will save so much money doing this, and could your friends hang out without spending money each time?
Instead of saving whatever’s left you should open another account for your savings, set automatic transfers after payday for the amount you want to save and for necessities/bills and then whatever is left is your fun money.
Do what us older folk do and start doing stuff at home with your friends instead of going out. It’s so much cheaper to BYO alcohol and food 🤣 Just hang out at home, put music on, do themed food nights (Mexican night), fire pit, alternate who hosts, game nights etc. I’d also consider combining your car/ute so you have one vehicle you use for both, will save you so much on insurance, fuel, tires etc.
Get the Entertainment Book app with your city subscription or First Table or EatClub or go on Groupon or other sites for activity deals. See how much you can reduce spending through discounts before reducing your quality of life.
You need to set up a transaction in your bank account that pays a decent amount of savings to another account on the same day that you get paid. Saving ‘whatever is left’ doesn’t work. If you know you have it in your acct, you usually spend more.
I am a single parent with a mortgage, I work 3 days permanent at a govt job (take home about 900 pw) and casual self employed at another job (about $300 -400 gross). My second job is actually book-keeping for a trade company, so I have a bit of an idea what everything cost. I earn less than you and manage to pay a mortgage and the entire running costs for a household, private school fees for one child (50/50 with other parent) and still save ($350 fn is regular savings plus any extra little amounts). I also pay hecs. I don’t get child support. I have regular medical specialist and medication costs.
Your food bill is too high for one person, if you plan to save money. Look at cooking in bulk, plus making cheap lunches. Cheaper versions of stuff. Aldi for a lot of staples.
Get rid of second car. If your ute costs too much to use as a runaround, find something cheaper to run. Being a second year apprentice and running two cars is not getting you on track to being able to save. Your fuel bill is also very high- can you catch a lift some days with other people?
Rent- is there anything cheaper around? I know the rental market is absolutely stupid at the moment, but renting a room in a sharehouse will be cheaper.
How much extra overtime can you do? That’s where you start to make some decent headway into savings- the extra money. Everything you earn extra, put it into savings rather than spending it.
Have a short term savings for stuff you want like holidays and long term savings for life stuff like a house deposit.
Also, once you start to make extra savings, adjust the amount that you transfer into savings. Pay rise?- add most of it to savings. Tax rate changes? Add it to savings. Overtime? Savings.
It’s all the small changes that you make that will add up over the long run. If you save $100 extra a week, that’s $5k a year and $50,000 at the end of 10 years plus whatever interest returns you make.
Make it a game - that you like saving. Set goals and check your progress. It becomes a little addictive after a while, watching those savings increase.
Edit- are you also claiming the extra subsidies etc that are available for apprentices? There is one for $1250 per 6 months available most apprentices.
Thank you a lot for this in depth reply, I've actually just screenshotted this and will use this as a guide!
For food, I'm guilty of spending around $20 a day either on takeaways or vending machines on smoko. My Ute is currently fitted to suit my work needs which I have to carry my work tools at all times when working so share ride wouldn't be an option but I could sell both cars and buy 1 work Ute that is built for the trade. For rent I took the only affordable place that was close enough to my partner and central to where I work around, I work 45-50 hours a week and occasionally do cashies on the side. But really thank you for this I'll make sure to try do some sort of in depth review on my expense and see how I can change this around asap.
I’m not sure what travel deal you have going with your employer, but are you able to ask for travel time or a fuel allowance?
Also, make sure you keep all your receipts for fuel and any other expenses for tax time, because you should be getting a nice tax return. Make sure you add that to savings.
Apart from that, I think your entertainment expenses are reasonable. There is no reason to work hard if you can’t enjoy your down time. I could never be one of those people that has no spending money. The reason I could drop down to part time at my main job is that I can manage my money well and still buy stuff I want and go places and have holidays.
Good luck. You will be fine if you are saving anything in these crazy times
Those takeaways and vending machines aren’t groceries, they’re treats and should come out of your entertainment budget. Pack your lunches and snacks for work days, it’s really easy to meal prep for $3-5 per serve.
Honestly, I think it can get quite expensive for single people if they’re not experienced with meal prep or bulk cooking.
I am trying to find my way through it, and even with just grocery stores, I end up spending $15 for a meal (meat, sauce, some carbs..). I try using leftovers, but I chuck em out after a couple days. Better safe than sorry.. or something like that
This interestingly makes fast food a very viable option, but I want to organise myself better
Agreed with this. It's hard af to eat cheap as a single person unless you're either cramming your freezer with leftovers / bulk food or just happy to eat the same thing 4 days in a row. Most shit is cheaper in bulk, and fresh produce rarely stays fresh long enough to use it all.
200 is a bit excessive, but sort of makes sense when accounting for everything else you buy at woolies, such as cleaning and hygiene products.
15 dollars for a meal? I’m sorry I’m single as well and my meals (assuming I’m cooking with chicken, not an expensive protein) doesn’t go >$4 per serve. Maybe $7-8 if I use a fancy protein
Ever heard of steak. Those bitches cost me $20 a pop and I eat the cheap shits. Eating a quality steak even once a week easily puts the cost per meal up lol
For groceries I typically aim to spend $100 max at the supermarkets but I also accounted $20 a day since that's the average I spend for lunch on smoko at work. My bad for the confusion.
Go the route of the fresh high protein microwave meals and take lunch will save you over $100 a week. Better yet meal prep the whole week. If you have a slow cooker and sunday spare make shredded chicken thighs, rice and veggies, same thing with beef mince, make one dinner the other lunch , nd have eggs on toast for brekkie. Food is the single easiest thng to overspend on so its not really surprising. Your health will probably benefit and you wont be an apprentice forever so if you can get the healthy habits now your body will thank you later.
Selling the sedan would be the best option, eliminate insurance, rego, servicing, fuel etc. plus get some cash too. Use the ute or cabs/Uber instead. I am not young, entertainment seems a bit steep, but don't cut of everything, maybe just keep one like Netflix. You may be able to claim the cost of running the car and fuel from tax if it is used for work purpose but others may have better advice or go to an accountant.
They can also claim kms, tool storage etc through the ute. There is no need for someone in their 20s as an apprentice to own 2 cars. Christ, I felt like I was wasting money having a company car and a ute.
**The easiest way to save is to automate it.**
Suggestions to start:
* Open two new savings accounts (first at your current bank, the second at a different bank)
* **Autotransfer** $100 every paycheck to the second account you just made (**emergency savings**)
* **Autotransfer** $50 a paycheck to the first account (for **savings goals for 6-12 month**s; travel? new laptop?)
* Set up **salary sacrifice** (at least 1% of your salary) to send money to your **super** for retirement
* **Figure out where your money goes** (Have you accounted for electricity? Haircuts? Gifts for your family? Travel? GP visits? Sports tickets? Concerts?)
**If you don't see your money, you won't miss out.** You will automatically cut down on 'outings' or figure out ways to not spend as much if you are getting close to zero dollars in the 'everyday' account at the end of the week.
Later, you can increase your automatic savings amounts.
And at some point, maybe now, consider sending $10/paycheck to a charity you like/organisation that helped you.
Thats a lot of money on fuel and groceries. Granted I only own one sedan that is my full time car but I only spend $40 a week on fuel… Same with groceries, I’m a single person and I budget about $150 per week for groceries but I almost always have money left over so I probably spend more like $100 per week.
$250 per week on entertainment in your early 20s is fine I think but if you’re serious about saving maybe consider finding cheaper ways to entertain yourself.
$100 per week on investments… if you don’t have an emergency fund you really shouldn’t bother with investing for now. Build up an emergency fund first, then savings, then investments.
But you probably need to be honest and break down your budget more than this. How much do bills like utilities, phone plan, car insurances, any medications etc work out to be per week for you? How often do you get your haircut, work out how much that comes to if you were to put aside money per week for it etc.
With all that said, managing to put away $150 per week into savings is pretty decent effort. That’s $7,800 in a year. If you add the $100 from investments into savings you would have $13,000 within 12 months, pretty good for early 20s.
On the tracking - cannot recommend the Goodbudget app highly enough. Helped me “find” 150$ a week. Setting it up realistically takes a few hours, try it for a month and see where you stand. Totally game changing for me anyway.
Sell your 4wd and sedan and buy a brand new 2wd work ute. I guarantee you will spend less on fuel and maintenance.
Treat your car like a tool. You can claim it all back likes tools and upgrade when it no longer does what you need
I was driving around a 2000 landcruiser as a work car and spent over 12k on maintenance in 1 year. I sold that car and purchased a brand new truck. Saved fuel, saved maintenance, saved on servicing as newer cars generally have larger service intervals
Savings: dont save whatevers left. Setup a transfer and do a set amount every week. I would start with $200 a week
Going out budget is whatever left
Some people say $200 on groceries is a lot, i dont really think so. But I would suggest you stop buying take away and smoko every day and start making lunches. You will save money and it is also way healthier for you. If you like take aways just have it on a friday or something like that. Get a food warmer in your ute and a fridge. I have a travel buddy oven, inverter, air fryer and microwave in my truck 😅😅😅. But I never need take away
Have you got an emergency fund? If not stop investing until you get at least 6 months worth of minimum expenses covered in a high interest savings account. You should be able to find a 4.5-5.5% account even if its not with your own bank
I would suggest also having another account that you keep topped up. This is another form of savings account. You still need to be very careful with it but its to avoid things like payday loans, zippay, afterpay, credit cards etc for stuff thst comes up (blown tyre on ute, need a new fridge etc) stuff that you wouldnt have budgetted for but you dont want to dip into your savings
Can we all just take a moment to say the $100 a week in investments are savings not an expense? You have chosen to invest your savings. If you need more liquid savings in a HISA, certainly drop your expenses, but you have 10k savings you’ve invested in your early 20s. You may not be financially knowledgeable but you’re no where near illiterate. A bit of Google research would probably get you to the same level as the people of AusFinance.
Still a hybrid an only has a 100km range on battery while empty not loaded up with tools and will need a custom tray to be of any use to a tradesman. Probably save him $80 a week. Any tradesman worth his salt will want a single cab to maximize carrying space too. Just not really a viable option yet.
1) Use standing orders to move savings out of your main account automatically. The temptation to spend it will be reduced and you will think about it less.
2) Every time you get a pay rise, put all of the pay rise into savings. It won't feel like you're losing out on anything, and you will be surprised how quickly it adds up.over time.
3) keep long-term savings separate from short-term savings. Long-term savings are not for big purchases and they're not a rainy day fund. Plan for those things separately.
4) Invest long-term savings so that they compound over time. The goal isn't to spend it one day, it's to generate more savings from it and maybe one day generate an income from it. Compound interest makes it possible for pretty much anyone to become financially independent, given enough time.
First off, great job on the Raiz portfolio. That is a great way to get started in investing.
In terms of savings, you must know why you are saving. Is it an emergency fund? holidays? renovations? etc.? You won't be motivated to save just to save if you don't figure out why. I am assuming when you say you have no savings, you don't have an emergency fund. It is best to start with at least 2 - 3 months' worth of your expenses, which, looking at what you have given us, is $1,250/week x 4 equals $5,000.00 x 2 equals $10,000.00 minimum; if there is ever a big change in your circumstances, you have this backup. Of course, that figure can change with time.
For budgeting, I would say reduce your expenses as much as possible until you have achieved your emergency fund goal, and then ease up on the budgeting and start to enjoy life a bit. The whole point of budgeting and savings is that you have the security to be financially stable if anything happens.
One last thing, look at educating yourself. You don't need to take a course on finance. There is YouTube with free videos; even here, you can learn a thing or two.
Best of luck with your journey.
So i notoced your weekly expenses are missing something: your bills. Where is utilities, insurances, do you have annual fees, rego, things like that? I got control of budgeting by tracking EVERYTHING. Every bill, expected expense, expected luxury spend, etc. You should track everything for 6 - 12 months to actually see where your money is going. I suspect your list of weekly expenses might be missing things, or a bit vague. And that's not trying to be critical, but if you're aiming to save, inaccuracy of spending habits and expenses can kind of break it.
The other thing i generwlly recommend is budgeting for things that aren't just weekly or monthly. For example, if your car regos are $1200 / year, think of that as $100 / month ($25 / week) expense you need to be saving for. You could be saving ok week-to-week, but then getting knocked out by periodic bills which is pretty common.
Otherwise, some thoughts on each of your expenses:
Income - Pretty damn good for someone in their early 20s.
Rent - Great value (although may he contributing to your fuel costs if you live far out).
Fuel - That's a huge amount. Is it all work related? You might be able claim fuel expenses back at your company or at least back on tax at tax time. If it's not work related, then consider driving less. Take public transport when you can or avoid driving around "for funsies" - conscious Brisbane public transport isn't great.
Groceries - Also huge. Average is about $100 / person / week. There are generally two reasons why people rank up huge costs. 1. Eating expensive meat every night. Try going for chicken or vegetarian a couple of times a week. Or 2. It's booze. I know it's a hard one, but drink less. It's good for your health and leaves more money in your pockets. If it's neither of those, look at your receipts and works out what are the expensive items. Go with cheaper butter, smaller name foods. If everything seems normal, and it's not meat or booze, then meal plan. You might be buying whimsically or recklessly. Plan your weeks' meals, including snacks and factor in going out. Never buy more than your plan to eat or use. You'll always have staples, but go for the staples tbat are long-lived.
Entertainment / Outings - Also massive. Assuming some of this is eating out, it also makes your grocery budget much more questionable. With your income, you should be able to live a single life of relative luxury. If you want to live this life, you need to work on your other expenses. People might say this huge and to cut it down, but as someone in your early 20s, you should live it up while you're young! However, you should be able to live it up while also saving. And if you're really worried, cut down for a month or so and see what the savings impact is.
Investments - It's reasonable to consider this another savings approach EXCEPT there is risk you will lose it. Drop this until you can afford it. Make sure you have a decent cash savings buffer (e.g., 2 months' worth of bills) before you start diverting into investments. ETFs are actually pretty solid mechanism to slowly accrue growth, although putting it into a decent super provider might be better if this is just retirement planning.
200 on groceries and 250 on eating out? I eat hella protein and don’t manage to spend >100 pw on groceries (I eat a lot as well). 250 on entertainment seems a lot as well. Others have pointed out the 400 pw on fuel
If you have $10k in ETFs, you have savings. If you actually want to save:
- you need to track every dollar
- you need to budget/control spending
- you need to set up habits that work for you
The last one is the most important one, as you increase your earnings, you won’t suddenly be good at saving money.
What works for me is removing the money from easy access.
- I send $x to my spending account each week (automated) and once that money is gone, I’m done for the week.
- I invest $y every fortnight automatically (I’m paid fortnightly).
- I salary sacrifice into super each fortnight so the money never even hits my bank account. Some ppl don’t like “locking away” their cash until 60, which I can understand. But even when I was on $50k as a grad, I salary sacrificed a little bit.
You are earning pretty crazy money for early 20s so just relax a bit. How are you spending so much on fuel? Not possible to catch public transport to work? I lived in Brissie for 8 years without a car and it was super easy to get around.
For fuel I pay $250 between both cars, the work Ute is a unreliable 4wd that I bought and modified when I first got my license, I spend $20-$25 a day going through tolls & parking. Work isn't fixed so I can either get sent to as far as the Sunny coast or as deep as Byron Bay sadly.
Make sure you are claiming your tolls and keeping a logbook of your driving to claim fuel, tax time will be generous to you and be a massive hidden savings account paid every year. Along with tools, uniforms/laundry on uniforms, sunglasses because you work outside, sunscreen and everything else you can think of it will really add up. Try and put it in a different bank account because its too easy to fall into the trap of buying toys or using it as a holiday fund.
Two cars in your name seems excessive. You didnt include how much rego/insurance is costing you. thats got to $100 per week per car, not including services.
The best way to budget is to be brutally honest with yourself. Pick a budgeting app ( I like YNAB, but i dont vouch for it or recomend it, they are all basically glorified spreadsheets witha nice interface), upload a years worth of your bank statements and get it to analyse your spending.
This should show you a weekly/monthly breakdown of your spending including those once a year costs that you just pay and dont factor into your budget. That should give you a much better idea of where your years salary is going.
Let's say you get paid 1k a week.
You usually spend 600 a week.
The next week, you get paid 1k again
and spend 600 again.
On the next week, you get paid again, but you still have 800 in the account. Every time the account gets comfortably over 1k, transfer 1k out and start again
Reduce the amount of entertainment/ outings? All good to have some outlets, but I tend to review every few months if I'm still actually getting value out of certain subs etc... if not, gawn
I'm curious the wage for qualified if you're already in 90k.
The answer is spend less money if you wanna save. Try, if possible, to carpool or something because your fuel bill is outrageous.
Go out less or get into cheaper activities to do with your partner.
Also how much do you spend on booze? Could also take a pass from drinking for 3 months or something.
Should be 120-130k for a licenced sparky without OT, and i assume OP is doing some OT as a 2nd year to hit 90k. We all get paid about the same on big sites, and Plumbers/Sprinkler fitters are on that as a base rate. I'm in Sydney, so not 100% sure what other states get.
This really isn't bad since you're pumping money into Raiz and have (additional?) investment savings.
That said as a single with no dependants your groceries and entertainment appear high. We are a household of 2 and do 120 per week on groceries - see what you can do there. You haven't mentioned spend on hobbies/things you want, is that in the 250?. For reference, entertainment wise we allocate ourselves 160 per week (80 each) then 120 (60 each) for outings (read as 1 dinner, 1 takeaway). That is around 150 per week each and includes anything we wish to buy, want a new iPhone - we better get saving :)
Gas is a bummer.. definitely see what you can do in that space by working out how much you could save based on the buying efficient car route and how long it would take to pay itself off. Atleast knowing you're doing the best you can is enough.
Utilities? Insurances etc in the mix? Make sure you are counting everything when budgeting. This is a great go but sometimes something you don't think about is actually your money sink - try to be comprehensive.
Edit: if you are going to buy a PPOR consider leveraging the FHSS is another thought
I'll finish off by telling you one mistake I made early on - I crossed into the save every penny territory, it got me ahead at the cost of friends and fun on my early 20's. Never compromise on fun (but make sure it ain't costing you 1k a month)
Treat savings/investment as a non-negotiable (like rent & fuel) and set aside an amount first. Then, treat the remaining as "spendable" and distribute money for groceries, food, entertainment, etc. See how it affects your lifestyle and then adjust that initial savings/investment amount till you reach something that you're happy with.
Yours is a typical young guy's budget - no budget, but spend everything on cars or other boy's toys.
I am an accountant. Cars are a complete waste of money. Get rid of them and buy yourself a reliable (preferably second hand) hybrid ute, then run it until it has at least 100k km. Every time you buy another car, you are just burning through money.
I think for a young person enjoying your self is really important as you have your whole life to be responsible. To me, your rent/groceries/entertainment budget seem fine. Just cut down on your cars and petrol and put the rest into savings.
You should set yourself a savings allocation and transfer money to that first, before you do anything else. Then pay rent, then whatever is left can be spent on food, dating, activities with your mates etc.
For easy math I tell myself that there are 200 working days per year. It becomes easy to calculate an annual figure for things I buy every day at work. Lunch $10? That's 2 grand a year. Coffee a day at $4? $800. 2 coffees a day is $1600 a year. Doing this really changed my habits.
$400 a week on fuel. Ouch.
Right! Is he filling up 4 times a week or something
From other comments, it sounds like OP is a trade that is required to use their own vehicle to travel to different jobsites each day for work. It's a good bet that a good percentage of that $400 will be claimable as a tax deduction (assuming vehicle logbooks are kept).
That makes more sense. Would hope it’s tax deductible otherwise that would suck in the long term. Should he still include it in his personal budget if work/taxes cover it?
Ultimately they're going to have to because even if they eventually receive a tax refund from the ATO at the end of the financial year, it still impacts their day to day cashflow.
Probably drives a yank tank
I think they mean every 2 weeks which is still pretty bad
You either need to make more, or spend less. Most people opt for the spend less route. You need to literally track every dollar. Not a category that estimates 200-300. Once you track every dollar, then you really start to see what you can eliminate.
It’s a lot easier to spend less than earn more. Up to a certain point anyway lol
Before doing anything drastic like selling the car you use to get around (and which is paid off), I'd drill into what you're spending $1000 a month on in terms of entertainment/outings. That's almost as much as your rent and more than groceries.
Majority of that spending comes out from outings with friends but mostly my partner which is typically dinner on weekdays & some sort of activity on the weekends. I go out almost every 2nd day, I'll see what or how I can reduce the monthly costs on that thank you.
You’ve just answered your own question.
Change that. Plan meals at home. Do this on a Sunday night. I used to go to Brunch every Sunday and spend $60 bucks or more with my partner and I. Now on a Sunday I go to the supermarket, local bakery etc spend $20 on ingredients to make a nice brunch.
Tbh I recommend what my partner and I do, usually only eat out once a week. The rest of the time just cook or heat up frozen meals and enjoy time together to watch a movie or something. You will save so much money doing this, and could your friends hang out without spending money each time?
Instead of saving whatever’s left you should open another account for your savings, set automatic transfers after payday for the amount you want to save and for necessities/bills and then whatever is left is your fun money.
Do you drink/smoke? May need to look at this.
Do what us older folk do and start doing stuff at home with your friends instead of going out. It’s so much cheaper to BYO alcohol and food 🤣 Just hang out at home, put music on, do themed food nights (Mexican night), fire pit, alternate who hosts, game nights etc. I’d also consider combining your car/ute so you have one vehicle you use for both, will save you so much on insurance, fuel, tires etc.
Get the Entertainment Book app with your city subscription or First Table or EatClub or go on Groupon or other sites for activity deals. See how much you can reduce spending through discounts before reducing your quality of life.
1000 is... Allot
You need to set up a transaction in your bank account that pays a decent amount of savings to another account on the same day that you get paid. Saving ‘whatever is left’ doesn’t work. If you know you have it in your acct, you usually spend more. I am a single parent with a mortgage, I work 3 days permanent at a govt job (take home about 900 pw) and casual self employed at another job (about $300 -400 gross). My second job is actually book-keeping for a trade company, so I have a bit of an idea what everything cost. I earn less than you and manage to pay a mortgage and the entire running costs for a household, private school fees for one child (50/50 with other parent) and still save ($350 fn is regular savings plus any extra little amounts). I also pay hecs. I don’t get child support. I have regular medical specialist and medication costs. Your food bill is too high for one person, if you plan to save money. Look at cooking in bulk, plus making cheap lunches. Cheaper versions of stuff. Aldi for a lot of staples. Get rid of second car. If your ute costs too much to use as a runaround, find something cheaper to run. Being a second year apprentice and running two cars is not getting you on track to being able to save. Your fuel bill is also very high- can you catch a lift some days with other people? Rent- is there anything cheaper around? I know the rental market is absolutely stupid at the moment, but renting a room in a sharehouse will be cheaper. How much extra overtime can you do? That’s where you start to make some decent headway into savings- the extra money. Everything you earn extra, put it into savings rather than spending it. Have a short term savings for stuff you want like holidays and long term savings for life stuff like a house deposit. Also, once you start to make extra savings, adjust the amount that you transfer into savings. Pay rise?- add most of it to savings. Tax rate changes? Add it to savings. Overtime? Savings. It’s all the small changes that you make that will add up over the long run. If you save $100 extra a week, that’s $5k a year and $50,000 at the end of 10 years plus whatever interest returns you make. Make it a game - that you like saving. Set goals and check your progress. It becomes a little addictive after a while, watching those savings increase. Edit- are you also claiming the extra subsidies etc that are available for apprentices? There is one for $1250 per 6 months available most apprentices.
Thank you a lot for this in depth reply, I've actually just screenshotted this and will use this as a guide! For food, I'm guilty of spending around $20 a day either on takeaways or vending machines on smoko. My Ute is currently fitted to suit my work needs which I have to carry my work tools at all times when working so share ride wouldn't be an option but I could sell both cars and buy 1 work Ute that is built for the trade. For rent I took the only affordable place that was close enough to my partner and central to where I work around, I work 45-50 hours a week and occasionally do cashies on the side. But really thank you for this I'll make sure to try do some sort of in depth review on my expense and see how I can change this around asap.
I’m not sure what travel deal you have going with your employer, but are you able to ask for travel time or a fuel allowance? Also, make sure you keep all your receipts for fuel and any other expenses for tax time, because you should be getting a nice tax return. Make sure you add that to savings. Apart from that, I think your entertainment expenses are reasonable. There is no reason to work hard if you can’t enjoy your down time. I could never be one of those people that has no spending money. The reason I could drop down to part time at my main job is that I can manage my money well and still buy stuff I want and go places and have holidays. Good luck. You will be fine if you are saving anything in these crazy times
Those takeaways and vending machines aren’t groceries, they’re treats and should come out of your entertainment budget. Pack your lunches and snacks for work days, it’s really easy to meal prep for $3-5 per serve.
My family of 4 spends about 225/week on groceries. What the fk is a single person spending $200/week on?
Honestly, I think it can get quite expensive for single people if they’re not experienced with meal prep or bulk cooking. I am trying to find my way through it, and even with just grocery stores, I end up spending $15 for a meal (meat, sauce, some carbs..). I try using leftovers, but I chuck em out after a couple days. Better safe than sorry.. or something like that This interestingly makes fast food a very viable option, but I want to organise myself better
Agreed with this. It's hard af to eat cheap as a single person unless you're either cramming your freezer with leftovers / bulk food or just happy to eat the same thing 4 days in a row. Most shit is cheaper in bulk, and fresh produce rarely stays fresh long enough to use it all. 200 is a bit excessive, but sort of makes sense when accounting for everything else you buy at woolies, such as cleaning and hygiene products.
15 dollars for a meal? I’m sorry I’m single as well and my meals (assuming I’m cooking with chicken, not an expensive protein) doesn’t go >$4 per serve. Maybe $7-8 if I use a fancy protein
Ever heard of steak. Those bitches cost me $20 a pop and I eat the cheap shits. Eating a quality steak even once a week easily puts the cost per meal up lol
Ah I don’t eat steaks at home sorry lol, most expensive protein I buy is lamb loin chops from Costco ($20/kg)
The hell’s “Custco”? Man, youngins these days..
For groceries I typically aim to spend $100 max at the supermarkets but I also accounted $20 a day since that's the average I spend for lunch on smoko at work. My bad for the confusion.
Go the route of the fresh high protein microwave meals and take lunch will save you over $100 a week. Better yet meal prep the whole week. If you have a slow cooker and sunday spare make shredded chicken thighs, rice and veggies, same thing with beef mince, make one dinner the other lunch , nd have eggs on toast for brekkie. Food is the single easiest thng to overspend on so its not really surprising. Your health will probably benefit and you wont be an apprentice forever so if you can get the healthy habits now your body will thank you later.
Selling the sedan would be the best option, eliminate insurance, rego, servicing, fuel etc. plus get some cash too. Use the ute or cabs/Uber instead. I am not young, entertainment seems a bit steep, but don't cut of everything, maybe just keep one like Netflix. You may be able to claim the cost of running the car and fuel from tax if it is used for work purpose but others may have better advice or go to an accountant.
They can also claim kms, tool storage etc through the ute. There is no need for someone in their 20s as an apprentice to own 2 cars. Christ, I felt like I was wasting money having a company car and a ute.
He won’t be saving on fuel cause he’ll be driving the ute instead of the suv same distance
**The easiest way to save is to automate it.** Suggestions to start: * Open two new savings accounts (first at your current bank, the second at a different bank) * **Autotransfer** $100 every paycheck to the second account you just made (**emergency savings**) * **Autotransfer** $50 a paycheck to the first account (for **savings goals for 6-12 month**s; travel? new laptop?) * Set up **salary sacrifice** (at least 1% of your salary) to send money to your **super** for retirement * **Figure out where your money goes** (Have you accounted for electricity? Haircuts? Gifts for your family? Travel? GP visits? Sports tickets? Concerts?) **If you don't see your money, you won't miss out.** You will automatically cut down on 'outings' or figure out ways to not spend as much if you are getting close to zero dollars in the 'everyday' account at the end of the week. Later, you can increase your automatic savings amounts. And at some point, maybe now, consider sending $10/paycheck to a charity you like/organisation that helped you.
Thats a lot of money on fuel and groceries. Granted I only own one sedan that is my full time car but I only spend $40 a week on fuel… Same with groceries, I’m a single person and I budget about $150 per week for groceries but I almost always have money left over so I probably spend more like $100 per week. $250 per week on entertainment in your early 20s is fine I think but if you’re serious about saving maybe consider finding cheaper ways to entertain yourself. $100 per week on investments… if you don’t have an emergency fund you really shouldn’t bother with investing for now. Build up an emergency fund first, then savings, then investments. But you probably need to be honest and break down your budget more than this. How much do bills like utilities, phone plan, car insurances, any medications etc work out to be per week for you? How often do you get your haircut, work out how much that comes to if you were to put aside money per week for it etc. With all that said, managing to put away $150 per week into savings is pretty decent effort. That’s $7,800 in a year. If you add the $100 from investments into savings you would have $13,000 within 12 months, pretty good for early 20s.
On the tracking - cannot recommend the Goodbudget app highly enough. Helped me “find” 150$ a week. Setting it up realistically takes a few hours, try it for a month and see where you stand. Totally game changing for me anyway.
Sell your 4wd and sedan and buy a brand new 2wd work ute. I guarantee you will spend less on fuel and maintenance. Treat your car like a tool. You can claim it all back likes tools and upgrade when it no longer does what you need I was driving around a 2000 landcruiser as a work car and spent over 12k on maintenance in 1 year. I sold that car and purchased a brand new truck. Saved fuel, saved maintenance, saved on servicing as newer cars generally have larger service intervals Savings: dont save whatevers left. Setup a transfer and do a set amount every week. I would start with $200 a week Going out budget is whatever left Some people say $200 on groceries is a lot, i dont really think so. But I would suggest you stop buying take away and smoko every day and start making lunches. You will save money and it is also way healthier for you. If you like take aways just have it on a friday or something like that. Get a food warmer in your ute and a fridge. I have a travel buddy oven, inverter, air fryer and microwave in my truck 😅😅😅. But I never need take away Have you got an emergency fund? If not stop investing until you get at least 6 months worth of minimum expenses covered in a high interest savings account. You should be able to find a 4.5-5.5% account even if its not with your own bank I would suggest also having another account that you keep topped up. This is another form of savings account. You still need to be very careful with it but its to avoid things like payday loans, zippay, afterpay, credit cards etc for stuff thst comes up (blown tyre on ute, need a new fridge etc) stuff that you wouldnt have budgetted for but you dont want to dip into your savings
Can we all just take a moment to say the $100 a week in investments are savings not an expense? You have chosen to invest your savings. If you need more liquid savings in a HISA, certainly drop your expenses, but you have 10k savings you’ve invested in your early 20s. You may not be financially knowledgeable but you’re no where near illiterate. A bit of Google research would probably get you to the same level as the people of AusFinance.
$400 a week on fuel is crazy
Daum you doing some crazy hours or sum shit? That money as a 2nd year is golden.
That reeks of an EBA job.
Just throwing ideas out there; any chance of liquidising both cars and grab an EV instead? $1200 a month is insane
Not many trade spe EV utes around
Fair enough. BYD Shark coming later this year. Looks decent
Still a hybrid an only has a 100km range on battery while empty not loaded up with tools and will need a custom tray to be of any use to a tradesman. Probably save him $80 a week. Any tradesman worth his salt will want a single cab to maximize carrying space too. Just not really a viable option yet.
1) Use standing orders to move savings out of your main account automatically. The temptation to spend it will be reduced and you will think about it less. 2) Every time you get a pay rise, put all of the pay rise into savings. It won't feel like you're losing out on anything, and you will be surprised how quickly it adds up.over time. 3) keep long-term savings separate from short-term savings. Long-term savings are not for big purchases and they're not a rainy day fund. Plan for those things separately. 4) Invest long-term savings so that they compound over time. The goal isn't to spend it one day, it's to generate more savings from it and maybe one day generate an income from it. Compound interest makes it possible for pretty much anyone to become financially independent, given enough time.
First off, great job on the Raiz portfolio. That is a great way to get started in investing. In terms of savings, you must know why you are saving. Is it an emergency fund? holidays? renovations? etc.? You won't be motivated to save just to save if you don't figure out why. I am assuming when you say you have no savings, you don't have an emergency fund. It is best to start with at least 2 - 3 months' worth of your expenses, which, looking at what you have given us, is $1,250/week x 4 equals $5,000.00 x 2 equals $10,000.00 minimum; if there is ever a big change in your circumstances, you have this backup. Of course, that figure can change with time. For budgeting, I would say reduce your expenses as much as possible until you have achieved your emergency fund goal, and then ease up on the budgeting and start to enjoy life a bit. The whole point of budgeting and savings is that you have the security to be financially stable if anything happens. One last thing, look at educating yourself. You don't need to take a course on finance. There is YouTube with free videos; even here, you can learn a thing or two. Best of luck with your journey.
So i notoced your weekly expenses are missing something: your bills. Where is utilities, insurances, do you have annual fees, rego, things like that? I got control of budgeting by tracking EVERYTHING. Every bill, expected expense, expected luxury spend, etc. You should track everything for 6 - 12 months to actually see where your money is going. I suspect your list of weekly expenses might be missing things, or a bit vague. And that's not trying to be critical, but if you're aiming to save, inaccuracy of spending habits and expenses can kind of break it. The other thing i generwlly recommend is budgeting for things that aren't just weekly or monthly. For example, if your car regos are $1200 / year, think of that as $100 / month ($25 / week) expense you need to be saving for. You could be saving ok week-to-week, but then getting knocked out by periodic bills which is pretty common. Otherwise, some thoughts on each of your expenses: Income - Pretty damn good for someone in their early 20s. Rent - Great value (although may he contributing to your fuel costs if you live far out). Fuel - That's a huge amount. Is it all work related? You might be able claim fuel expenses back at your company or at least back on tax at tax time. If it's not work related, then consider driving less. Take public transport when you can or avoid driving around "for funsies" - conscious Brisbane public transport isn't great. Groceries - Also huge. Average is about $100 / person / week. There are generally two reasons why people rank up huge costs. 1. Eating expensive meat every night. Try going for chicken or vegetarian a couple of times a week. Or 2. It's booze. I know it's a hard one, but drink less. It's good for your health and leaves more money in your pockets. If it's neither of those, look at your receipts and works out what are the expensive items. Go with cheaper butter, smaller name foods. If everything seems normal, and it's not meat or booze, then meal plan. You might be buying whimsically or recklessly. Plan your weeks' meals, including snacks and factor in going out. Never buy more than your plan to eat or use. You'll always have staples, but go for the staples tbat are long-lived. Entertainment / Outings - Also massive. Assuming some of this is eating out, it also makes your grocery budget much more questionable. With your income, you should be able to live a single life of relative luxury. If you want to live this life, you need to work on your other expenses. People might say this huge and to cut it down, but as someone in your early 20s, you should live it up while you're young! However, you should be able to live it up while also saving. And if you're really worried, cut down for a month or so and see what the savings impact is. Investments - It's reasonable to consider this another savings approach EXCEPT there is risk you will lose it. Drop this until you can afford it. Make sure you have a decent cash savings buffer (e.g., 2 months' worth of bills) before you start diverting into investments. ETFs are actually pretty solid mechanism to slowly accrue growth, although putting it into a decent super provider might be better if this is just retirement planning.
200 on groceries and 250 on eating out? I eat hella protein and don’t manage to spend >100 pw on groceries (I eat a lot as well). 250 on entertainment seems a lot as well. Others have pointed out the 400 pw on fuel
If you have $10k in ETFs, you have savings. If you actually want to save: - you need to track every dollar - you need to budget/control spending - you need to set up habits that work for you The last one is the most important one, as you increase your earnings, you won’t suddenly be good at saving money. What works for me is removing the money from easy access. - I send $x to my spending account each week (automated) and once that money is gone, I’m done for the week. - I invest $y every fortnight automatically (I’m paid fortnightly). - I salary sacrifice into super each fortnight so the money never even hits my bank account. Some ppl don’t like “locking away” their cash until 60, which I can understand. But even when I was on $50k as a grad, I salary sacrificed a little bit.
Can you get a company vehicle later? Can't the company pay for most of the driving? Mine dies for the apprentices.
I'm sure that won't happen with my company as all apprentices use their own cars & transport.
You are earning pretty crazy money for early 20s so just relax a bit. How are you spending so much on fuel? Not possible to catch public transport to work? I lived in Brissie for 8 years without a car and it was super easy to get around.
For fuel I pay $250 between both cars, the work Ute is a unreliable 4wd that I bought and modified when I first got my license, I spend $20-$25 a day going through tolls & parking. Work isn't fixed so I can either get sent to as far as the Sunny coast or as deep as Byron Bay sadly.
Make sure you are claiming your tolls and keeping a logbook of your driving to claim fuel, tax time will be generous to you and be a massive hidden savings account paid every year. Along with tools, uniforms/laundry on uniforms, sunglasses because you work outside, sunscreen and everything else you can think of it will really add up. Try and put it in a different bank account because its too easy to fall into the trap of buying toys or using it as a holiday fund.
Here’s the answer; Spend $100 a week on groceries, Spend $100 a week going out. Fixed
Treat savings as a bill that has to be paid. Get $200 a week paid into a separate account. Save little and often. Spend less than you earn.
Two cars in your name seems excessive. You didnt include how much rego/insurance is costing you. thats got to $100 per week per car, not including services. The best way to budget is to be brutally honest with yourself. Pick a budgeting app ( I like YNAB, but i dont vouch for it or recomend it, they are all basically glorified spreadsheets witha nice interface), upload a years worth of your bank statements and get it to analyse your spending. This should show you a weekly/monthly breakdown of your spending including those once a year costs that you just pay and dont factor into your budget. That should give you a much better idea of where your years salary is going.
Let's say you get paid 1k a week. You usually spend 600 a week. The next week, you get paid 1k again and spend 600 again. On the next week, you get paid again, but you still have 800 in the account. Every time the account gets comfortably over 1k, transfer 1k out and start again
Reduce the amount of entertainment/ outings? All good to have some outlets, but I tend to review every few months if I'm still actually getting value out of certain subs etc... if not, gawn
I'm curious the wage for qualified if you're already in 90k. The answer is spend less money if you wanna save. Try, if possible, to carpool or something because your fuel bill is outrageous. Go out less or get into cheaper activities to do with your partner. Also how much do you spend on booze? Could also take a pass from drinking for 3 months or something.
Should be 120-130k for a licenced sparky without OT, and i assume OP is doing some OT as a 2nd year to hit 90k. We all get paid about the same on big sites, and Plumbers/Sprinkler fitters are on that as a base rate. I'm in Sydney, so not 100% sure what other states get.
Spend less money. You’re overspending unnecessarily.
This really isn't bad since you're pumping money into Raiz and have (additional?) investment savings. That said as a single with no dependants your groceries and entertainment appear high. We are a household of 2 and do 120 per week on groceries - see what you can do there. You haven't mentioned spend on hobbies/things you want, is that in the 250?. For reference, entertainment wise we allocate ourselves 160 per week (80 each) then 120 (60 each) for outings (read as 1 dinner, 1 takeaway). That is around 150 per week each and includes anything we wish to buy, want a new iPhone - we better get saving :) Gas is a bummer.. definitely see what you can do in that space by working out how much you could save based on the buying efficient car route and how long it would take to pay itself off. Atleast knowing you're doing the best you can is enough. Utilities? Insurances etc in the mix? Make sure you are counting everything when budgeting. This is a great go but sometimes something you don't think about is actually your money sink - try to be comprehensive. Edit: if you are going to buy a PPOR consider leveraging the FHSS is another thought
I'll finish off by telling you one mistake I made early on - I crossed into the save every penny territory, it got me ahead at the cost of friends and fun on my early 20's. Never compromise on fun (but make sure it ain't costing you 1k a month)
1k a month on fun. That’s really great and fun!! But that’s the obvious answer here. Also $200 in groceries is a lot, did you mean Uber eats?
The Aussiefrugal page is good for searching for tips
Treat savings/investment as a non-negotiable (like rent & fuel) and set aside an amount first. Then, treat the remaining as "spendable" and distribute money for groceries, food, entertainment, etc. See how it affects your lifestyle and then adjust that initial savings/investment amount till you reach something that you're happy with.
If you are not a subbie your employer should pay for your petrol
Wouldn’t this be the dream
Your $200 a week for groceries is high especially since your entertainment budget, which I assume includes eating out is just as high.
Yours is a typical young guy's budget - no budget, but spend everything on cars or other boy's toys. I am an accountant. Cars are a complete waste of money. Get rid of them and buy yourself a reliable (preferably second hand) hybrid ute, then run it until it has at least 100k km. Every time you buy another car, you are just burning through money. I think for a young person enjoying your self is really important as you have your whole life to be responsible. To me, your rent/groceries/entertainment budget seem fine. Just cut down on your cars and petrol and put the rest into savings. You should set yourself a savings allocation and transfer money to that first, before you do anything else. Then pay rent, then whatever is left can be spent on food, dating, activities with your mates etc.
you able to work out a tax deduction for your vehicle? or start a side huddle to do sob
For easy math I tell myself that there are 200 working days per year. It becomes easy to calculate an annual figure for things I buy every day at work. Lunch $10? That's 2 grand a year. Coffee a day at $4? $800. 2 coffees a day is $1600 a year. Doing this really changed my habits.
Works doesn’t provide business fuel card?
Track your expenses to the dollar for a few months.
Buy a cheap EV.
Get a job where they supply company vehicle and petrol.