Discover tips and tricks on how to save money.


I appreciate that lumping a whole group of people into one category for the purpose of an article is not technically possible. Some of us are married, some of us have kids, some of us have international careers, others of us are artists or writers, have zero hour contracts, or are unemployed. I also appreciate that someone in Cardiff doing the same job as someone in London, will not be earning anywhere near the same amount.

We all earn different amounts, in different ways, and have different spending priorities. The variables are endless. However, it’s interesting to look at the statistics to see what we 'shold' be spending in order to make the savings and changes that we want, and to look at our current spending habits and adjust accordingly if we wish.

Take all of these with a pinch of salt and apply them to your own situation, but like I said, it’s interesting to see the stats. More information can only be a good thing.

1. Housing

According to the Guardian last week, Millenials are spending over a third of their post-tax income on housing. Just for comparison, this is three times more than their grandparents did.

That sounds about right to me, when I look at my rent. I’m spending about 36% of my salary on rent. (As this is London keep in mind that this is 36% of my salary for just one room in a house of 4.)

However, the general market advice is that you should not spend more than 28% of your salary on housing (be it a rent or mortgage).

This means that, technically, people spending more than 28% of their income on housing are overspending and should move into cheaper accommodation.

Take from this what you will. I personally can’t afford to pay for travel if I live further away from work. I’m sure I’m not alone.

2. Food

This is slightly more fluid. You get different advice from different 'experts', however rule of thumb (as with everything) is just spend what you can afford.

However, statistically speaking, the average British family spends roughly £53 a week on food shopping, whereas the USDA reports that Americans spend roughly 11% of their monthly income on food, although this figure accounts for both food shopping and eating out.

Most advice is; look at what you earn, then budget around it, simple as that. When I saw that figure I did worry slightly, as I spend roughly the same amount a month on food as the average British family. Which may account for why I can never afford a nice holiday.


3. Fun

Again, this varies, but the same rhetoric applies; spend only what you can afford.

Looking at the figures, most financial advisors would recommend you spend between 5-10% of your monthly income on ‘fun stuff’.

The average American apparently spends 5.6% of their annual income on entertainment. This figure may be on the change though, as a study by Eventbrite found that 78% of millenials would rather spend money on an experience than buy something.

What’s important here is defining ‘fun stuff’. You might file ‘dinner with friends’ under ‘food’ instead of ‘fun’. This may skew your figures a little, making your fun budget smaller than it would otherwise be, and your food budget a little higher than average, so just keep that in mind when you’re partitioning your salary.

4. Transport

Again, this is going to vary depending on why and how often you need transport (ie. commuting to work, or just for the weekend), your access to good public transport links, or your ability to run your own vehicle.

I used to spend roughly 5% of my monthly salary on transport, and that was taking into account that I had a free commute to work.

According to the Office of National Statistics, the average weekly household spend on transport in 2015/16 was £72.70 and for the majority of British regions was the highest expenditure category alongside housing (net), fuel and power. Obviously converting this into a percentage amount of your salary depends on what you earn.

In the states, statistics show that as recently as 2013 Americans spend up to 14% of their take home salary on transport.

5. Savings

This is always the category that splits opinion. There is no effective ‘one size fits all’ approach. (Although the 50/30/20 rule has become a popular piece of savings advice.)

A report by Aviva found that 1 in 4 families in the UK have less than £95 in savings. This is clearly a worrying state of affairs. The advice given by the British government’s Money Advice Service doesn’t state a percentage of income for a savings goal, rather they advise that everyone should have “3 months of essential outgoings available”.

There is no hard and fast savings ‘rule’, but in effect; save as much as you possibly can.

Protect your paycheque and save with Oval Money!



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