February payday and the beginning of this year-long experiment, where we're planning on committing to a different lifestyle every month. This month, we'll be budgeting to live to the London Living Wage.
The current living wage in London is £8.55 and, based on a working week of 35 hours, that would give you a salary of £15,561.00. A quick visit to listentotaxman.com shows how much of this you would receive each month:
So that's £1,092.79 income post tax and NI each month. I included Student Loan repayments in the calculator because I figure the inclusion will make this figure a bit more relevant to a lot of people but regardless, on London Living Wage, turns out you'll be paying sweet FA as you're not earning enough. Now to work out essential and extra (relatively unexpected and unavoidable) outgoings and what you'd be left with after these:
ESSENTIAL: Rent. This website (http://www.london.gov.uk/rents/) gives a vague indication of average weekly rental cost of a bedroom in SE16 (where I live); £109 - £129. Using £119 as a midway point, this works out as £515.67 per month, not including bills. I'm on £500 with bills.
That's 45.8% of monthly income spent on rent.
ESSENTIAL: Travel. I've got to get to work, guys. This is essential. Travel costs can be brought down long-term by buying a bike, but it seems unwise to blow that sort of cash in the month of this experiment. I'd be on bread and cuppa soup from day 4 if I did. I've walked and run my journey before, but at 6.4km it's pretty exhausting and I'm sure what I save in TFL costs, I'd end up spending on bananas, energy bars and sweat bands. A zone 1-2 monthly travelcard is £116.80.
10.7% of income spent on travel.
ESSENTIAL: Phone. The quality of your phone can obviously bring this category into luxury, but I'm pretty sure if you're trying to stay connected to your friends and potential employers if you're not working, this is an essential. My 2-year Orange contract works out most months around £25 after VAT. I also got a letter this month kindly telling me that my rates were going up to fit with inflation. And I mean, it's not like the biggest price mark-up in the entire world is the cost of texts. Sure, 12p is entirely appropriate when it costs less then 3/10 of a penny to the network. Just your average 6,000% mark up. No biggie. I imagine a more sensible consumer could get a £20 p/m deal. Old Orange faithful douche here is on £25 though.
2.3% of income.
EXTRA: Insurance. £10 a month for contents insurance/extra bills. Not an essential, but having once left our door unlocked all day (sorry, housemates) and arriving home with everything still in place, I'm pretty sure I've used up my luck. Also, apparently fires and leaks regularly occur in blocks of flats and I'm 100% certain I haven't coated my few valuables in fire/flood proofing spray.
1% of income.
EXTRA: Donations. £15 a month. Completely avoidable but it's good for the world and good for the soul.
1.5% of income.
So after all of these things, we're left with £425.99 for the month (39% of salary), working out at a daily budget of £14.01 (based on an average month of 30.4 days).
Obviously this can be lived on. Not trying to patronise anyone earning this or less (though this will probably be an accidental outcome of these posts); you can eat, work, sleep in a bed and talk to your loved ones, probably buy a Morse or Die Hard box set and some new socks/tights (as yours will undoubtedly develop holes/ladders over the next month. Boy, they don't make them like they used to). This isn't some big social experiment and only a slight comment on employment and wage law; I just spent £60 more than I earned last month and clearly need to cut back...This seemed like an interesting budget to impose (and achievable in a way that the actual minimum wage of £6.19 an hour isn't), and a way of working out where money regularly gets spent and if there are any habits that it makes sense to change. It's also conveniently only a 28 day month before the next pay day, so really I'm laughing all my way to getting that £60 back. Laughing.
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