Budgeting is a universal challenge. Living costs and incomes vary from place to place, but no matter where you live, you still need to fit your expenses into your income and find a way to set money aside for the future. Those challenges change with your age and income. For people on low incomes, budgeting can be a matter of survival and a struggle to stretch income to cover expenses. As you age and earn more you will put more emphasis on saving and investment. Today we’ll look at the finances of a young couple in Leicester, England, living on a below-average income.
Leicester is a university town in the midlands of England. The population is around 300,000, and around 35,000 of those are students at the city’s two major universities. The universities are also major employers, with textiles, footwear, and engineering also contributing to the economy. The high student population contributes to a relatively low cost of living, and Leicester is considered one of the most affordable cities for students in England.
Did You Know
- The average take home salary in Leicester, England is GBP26,000 (US$36,868)/year, or GBP2,166.67 (US$3,072)/month.
- English income taxes exempt individuals with less than GBP12,570 (US$17,824) in annual income. People with higher incomes pay from 20% up to 45%, with the 45% rate affecting only those with over GBP150,000 (US$212,702) in annual income.
- England has a national insurance system that covers health, pension, and maternity benefits. Employees pay 12% of earnings above GBP184 (US$261)/week, dropping to 2% of earnings above GBP968 (US$1,373)/week.
- The unemployment rate in Leicester is 5.5%%.
What Does it Cost in Leicester, England?
- 3-course meal for 2, mid-range restaurant: GBP45.00 (US$64)
- Beef round, 1 kg: GBP 8.22 (US$11.66)
- Domestic beer, .5 liter: GBP3.20 (US$4.54)
- Broadband Internet: GBP 30.40 (US$43.11)
- Cinema, 1 seat: GBP 8.55 (C$12.12)
- Monthly public transport pass: GBP56.00 (US$79.41)
- 3 bedroom apartment, city center: GBP942.86/month (US$1,337)
On the “Big Mac Index” Great Britain is the 12th most expensive of 56 countries surveyed, with the iconic burger costing the equivalent of US$7.29.
Getting to Know the Household
We started our interview with some basic questions about the household, their lifestyle, and their approach to managing their finances.
Introduce yourself – Tell us a couple of things about yourself so we get to know you better.
Mexican-American female, 26 years old. Have experienced relative poverty, have had depression, anxiety, eating disorders.
Location – Where do you live (city, country)? What kind of place is it? How do you like living there?
Leicester, UK. Moved from the USA to study. Live in a studio, horrible landlords.
Household structure – How many adults, kids, what ages?
Occupation – What do you and other adults in the household do for a living?
Net household income – What is the take-home pay of your household (income after taxes and other deductions)?
600 GBP per month (US$851).
How would you describe your standard of living? – Based on the place you live in, your income, compared to other people around you…
What is your approach to managing your finances? – What is your general approach or personal philosophy on managing your finances? Do you use a budget and if you do do you generally stick to it? How do you make financial decisions in your household?
Track spending with Excel. Minimalism with a budget plan.
Let’s Break Down the Expenses
Now we’ll break down our respondent’s monthly household expenses into different budget categories.
Rent includes water and internet.
Electric = GBP20 (US$28)
My phone= GBP10 (US$14)
His phone= GBP13 (US$18)
Groceries less than GBP200 (US$284) (lowest was 119). Dining out/takeout/fast food, GBP60 (US$85).
🏦 Debt & loans
👗 Clothing and personal care
All the clothing bought in the last 9 months is socks, a pair of shoes, underwear, a bra, 1 thermal shirt, 1 charity shop dress, towels, 2 shirts, 1 scarf, 1 jean, and 1 blazer—all on sale.
🧹 Household supplies
The miscellaneous section includes clothes (above), lotto, toilet paper, allergy pills, razor, reading glasses, eye drops, hair products, face mask, deodorant, fungal treatment, cleaning products, cooking supplies.
Adobe = GBP16.24 but canceled it recently.
Amazon = GBP3.99
Netflix = 0 (family pays).
Youtube = 0
Disney = 0 (family pays).
* All figures are as reported by respondents. Totals may not add up to 100%.
What are your thoughts on this personal budget? Let us know in the comments below!