Right out of teacher’s college I decided I wanted to teach in London. I was attracted by the culture, the proximity to the rest of Europe, and the chance to really challenge myself. Before I moved, I asked around online about the cost of living but no one really gave me concrete answers, but now that I’m in China, I dug back through all my UK receipts and figure out exactly how I spent my money there.
Main takeaways:
1. Living in London is expensive but not difficult, I did it on a new teacher’s salary and had a great time with savings leftover.
2. I eat out way too much. My eating out cost was greater than my groceries cost.
3. 10/10 would still recommend (you do in your early 20s)*
Here’s a breakdown for each year. 2016 only had 4/12 months, 2017 is the full year, and 2018 only had 7/12 months.
Annual income: gross is just under $52,000, net is roughly $36,000. Yeah, those taxes are rough.
Pats on the back:
1. Still saved 20% of my monthly pay! I set up auto-deductions into my savings account and had my employer also automatically hold back 12% of my gross pay.
2. Managed to meal prep lunch for an average of 5/7 days, and dinners for 4/7 days. Never bought breakfast.
3. Lived the life my younger self dreamed of.
Lessons for myself:
Beware of impulse buys and be proactive about spending.
- On average, I made about 3 transactions per day. I’m guessing it’s more like an average of 1 on workdays and 8 on the weekends. I made all the typical mistakes: buying takeout when I have food at home, engaging in retail therapy and taking Uber rides instead of public transit. Generally being a young, semi-financially-illiterate adult who’s experiencing having a lot** of disposable income for the first time in her life in an exciting city.
- Thank god I don’t have any expensive vices. Just by not drinking I cut my eating out costs in half, and I’m not a coffee drinker
I don’t need a lot to be happy.
- I lived in a very small room in a shared flat, I biked to work, and most of my meals are simple. My entire wardrobe can fit in one (large) suitcase. And yet, I had never once felt deprived.
- I can easily cut back in areas like takeout and Uber rides.
- If I move or switch jobs to a location with lower costs of living I can save SO MUCH (and in fact, I have saved over 80%+ since coming to China)
- The things that brought me the most joy was just hanging out with friends. I get the same amount of joy whether I see them on a picnic or if I see them over an $80 dinner.
Being financially aware is not exciting but really really important!
- Only this year have I seriously started looking at my own finances and I’m coming to terms with how much better I wished I was. But, without going through this experience would I have understood these things about myself? Likely not.
- If you feel you’re lacking knowledge about something, go out and look for it! I was not taught a lot of what I know now, but instead of blaming my parents or the education system*** I’m fixing these gaps myself through the magic of Google and Youtube.
- I had a couple of big financial hits (had my luggage stolen, foreign taxes I wasn’t aware of, missed flights) but because I had savings it worked out to be only minor inconveniences. Replacing the lost luggage alone cost me $3000. I know people in the same field of work who cannot take that financial hit because they were living paycheque to paycheque.
- Self-reflection is the most valuable learning tool.
How I calculated my spending:
I mainly used my debit card for everything so I downloaded my entire transaction history from Lloyds’ website as an excel sheet. I created new columns for each category I’m interested in and just cut and paste the amount into the appropriate one and use the =SUM function. It ain’t elegant but it got the job done.
Here’s a screenshot of 2017
*At least, if you were going to live like I did. If I had stayed I wouldn’t have been happy about my savings rate at all.
**Relative to what I’ve had before.
***There is definitely a lot of room for improvement in all school curriculums with regards to financial literacy though.