Revealing London living costs in 2024

Pranav Kalra

16 Jun 202408:29

Summary

TLDRIn this video, Pranav, a photographer and creator living in London, breaks down the costs of living in the city. He discusses three key expense categories: needs (50%), wants (30%), and savings (20%). Pranav shares insights on housing costs, utilities, groceries, transportation, council tax, and subscriptions like Amazon Prime and Uber. He also touches on personal spending habits, such as dining out and coffee expenses, and emphasizes the importance of saving and investing. His experiences as a freelancer highlight the challenges and strategies for managing expenses in one of the world’s most expensive cities.

Takeaways

💰 Living in London is expensive and requires careful budgeting.
🏠 Pranav shares a 4-bedroom house with three other people, with rent costing £950 per person.
⚡ Utilities like gas and electricity cost around £100-120 per month in summer and increase in winter.
🚰 Water bills come every six months, averaging £10 per person monthly.
📶 Wi-Fi costs £40 per month, divided among four people, and mobile phone expenses are around £1 per month with Vone.
🛒 Grocery expenses average £250 per month, divided by four roommates.
🚌 Public transportation (TFL) costs Pranav about £80 monthly.
🧾 Council tax is around £155 per month, divided among the roommates, and varies based on location.
📉 Pranav divides his expenses into needs (50%), wants (30%), and savings (20%).
💼 As a freelancer, Pranav invests 10% of his income in shares and an ISA, and sends 10% back home to his mother.

Q & A

What are the three major categories the speaker divides their expenses into?
-The speaker divides their expenses into three categories: needs (50% of income), wants (30% of income), and savings (20% of income).
How much does the speaker pay for rent, and what type of accommodation do they live in?
-The speaker pays £950 for rent, living in a 4-bedroom terraced house shared with three other people.
What are the speaker’s utility costs for gas, electricity, and water?
-For gas and electricity, the cost is around £100 to £120 per month in summer, and it increases during the winter. Water costs around £10 per person monthly.
How much does the speaker spend on groceries each month?
-The speaker and their flatmates spend around £250 per month on groceries, which is divided among four people.
What is the speaker’s average monthly transportation cost?
-The speaker spends around £80 a month on transportation within London, using Transport for London (TFL).
What is council tax, and how much does the speaker pay for it?
-Council tax is a local tax that covers services like waste collection and neighborhood upkeep. The speaker pays £155 a month, divided among four people.
How much does the speaker spend on subscriptions in the UK?
-The speaker spends around £16 a month on subscriptions, including Amazon Prime (£5), Smol cleaning products (£5-£8), and Uber One (£6).
Does the speaker spend much on going out to eat or drink?
-The speaker often receives free food when working at restaurants, but when going out for drinks on a weekend, they typically spend around £40 per night.
How does the speaker save money on coffee expenses?
-Instead of buying coffee from shops (which costs £3-4 per cup), the speaker uses espresso pods at home, which significantly reduces the cost.
What does the speaker do with their savings, and how do they divide them?
-The speaker allocates 10% of their income to investments in shares and an ISA account, and another 10% is sent back home as a gift to their mother.

Outlines

00:00

🏙️ Cost of Living in London: A Personal Breakdown

The speaker introduces the video topic, explaining that they will break down the costs of living in London. They acknowledge London's reputation as an expensive city, confirming this based on their own experience of living there for almost two years. The speaker briefly introduces themselves as Pranav, a photographer and creator working full-time in London. They note that their expenses have changed since completing their master's degree in films. The upcoming breakdown is divided into three categories: needs (50% of income), wants (30%), and savings (20%), with further explanation to follow.

05:02

🏠 Housing and Utilities: Living Between Zones 1 and 2

The speaker starts by discussing housing, their largest expense. They live in a 4-bedroom terraced house shared with three others, located between Zones 1 and 2 of London. The rent is £3,800, divided equally, making each person's share £950 per month. Gas and electricity range from £100 to £120 in summer but increase significantly in winter due to the house’s size. Water bills, which are issued every six months, cost about £10 monthly per person. Wi-Fi costs £40 a month, divided by four, and mobile phone services cost £1. Groceries amount to £250 a month, shared by all. Personal items are excluded from this total, and transportation using the TFL costs around £80 per month.

🚮 Council Tax and Miscellaneous Living Costs

Pranav explains the concept of council tax, which he initially misunderstood as a property tax. Instead, it's for services like trash collection and neighborhood maintenance. The council tax bill is £155 per month, shared by the household. As a student, he did not pay this tax, but now, on a graduate visa, he does. Pranav calculates his total essential expenses, which amount to £1,175 monthly. He then begins to discuss the next expense category: wants.

📦 Subscriptions and Non-Essential Spending

The speaker discusses his limited subscriptions in the UK, noting that most are under his family plan in his home country. His UK-based subscriptions include Amazon Prime (£5 per month) and a sustainable cleaning product subscription called 'Smol' (£5-8 per month). He also subscribes to Uber One (£6 per month), which provides discounts on Uber rides and groceries from select venues. In total, these subscriptions amount to £16 monthly. Moving on to 'wants,' Pranav mentions his tendency to eat out for free due to his work photographing restaurants. However, on weekends, nights out for drinks can cost around £40 per person.

☕ Coffee Habits and Uber Usage

While many people in London spend on coffee daily, Pranav saves money by using espresso pods at home. He mentions that a typical coffee costs £3-4, and having coffee every day could add up to £200 a month. The speaker also uses Uber frequently, especially for commuting to work or returning from late-night events. The cost of Ubers for work is covered by his agency, but he still saves money with the Uber One subscription. This section highlights the significance of coffee and transportation in the speaker's non-essential expenditures.

💰 Savings and Investment Strategies

Pranav explains his approach to saving, allocating 20% of his income towards this. He splits it into two parts: 10% goes into shares and an ISA account, and the other 10% is sent back home as a gift to his mother each month. Since he works as a freelancer, his income can fluctuate, so the exact amount saved varies. Pranav mentions wanting to partner with brands to sponsor the video but chose to upload it quickly instead. He concludes by recommending viewers to save and invest, referencing Revolut, his first bank in London.

📩 Final Thoughts and Contact Information

The video wraps up with Pranav encouraging viewers to reach out if they want more information about moving to London, life as a student, or living abroad. He invites them to leave comments or contact him via Instagram, which he plans to link in the video. Pranav thanks the audience for watching and signs off with a promise to respond to any questions.

Mindmap

Keywords

💡Cost of living

The cost of living refers to the total amount of money needed to cover basic expenses like housing, food, transportation, and other essentials in a particular area. In the video, the speaker emphasizes that living in London is expensive, sharing his personal experience with the high costs of rent, utilities, and other expenses. This concept is central to the video as it addresses how difficult it can be to sustain a living in such an expensive city.

💡Housing

Housing refers to the cost associated with renting or buying a place to live. In the video, the speaker mentions that he lives in a shared house with three others and pays £950 as his share of rent. Housing is presented as the largest portion of monthly expenses in London, and the speaker's arrangement illustrates how many people opt to share accommodations to manage these high costs.

💡Utilities

Utilities include essential services like gas, electricity, water, and internet. The video explains how gas and electricity bills increase significantly in the winter due to heating needs, while water bills are less frequent but still factor into monthly expenses. Utilities are an important part of the 'needs' section of the budget, accounting for essential living costs.

💡Grocery

Grocery expenses cover the cost of food and household supplies. The speaker admits to being unorganized in grocery shopping but mentions that his household spends around £250 a month, divided among the four roommates. This highlights how essential food expenses are managed in a shared living situation and how they fit into the broader cost of living in London.

💡Transportation (TFL)

Transportation, specifically the use of Transport for London (TFL), is a key expense for people living in the city. The speaker spends approximately £80 a month commuting around London. This cost is common for London residents who rely on public transport to navigate the city's large size and dense traffic, making it an important factor in daily budgeting.

💡Council tax

Council tax is a local government tax used to fund public services like waste collection and street cleaning. The speaker explains that council tax is a new concept for those unfamiliar with the UK, and it varies by location. For his current living situation, the monthly council tax is £155, which is divided among housemates. The tax is an unavoidable expense unless on a student visa, as mentioned in the video.

💡Wants

Wants refer to non-essential expenses, such as subscriptions, dining out, or entertainment. The speaker allocates 30% of his income to 'wants,' which include Amazon Prime, Uber One, and occasional dining. This category covers discretionary spending that enhances lifestyle but is not critical for survival, emphasizing how people balance indulgence with their budget in an expensive city like London.

💡Savings

Savings refer to money set aside for future use or emergencies. The speaker reserves 20% of his income for savings, with 10% going to investments like shares and an ISA account, and the remaining 10% sent back home as a gift to his mother. This highlights the importance of financial planning and creating a safety net, especially for freelancers or individuals with fluctuating incomes.

💡Freelancing

Freelancing refers to working independently rather than being employed full-time by a company. The speaker mentions working as a freelancer, which means his income can vary from month to month. This is relevant to his financial planning, as he needs to adjust his savings and spending based on the income he receives through his creative work as a photographer.

💡Student visa

A student visa is a type of visa that allows individuals to study in a foreign country. The speaker mentions that while he was on a student visa, he was exempt from paying council tax. This is an important distinction for international students moving to the UK, as it can significantly affect their cost of living while studying.

Highlights

London is known to be expensive, and sustaining a life here can be challenging.

Pranav has lived in London for almost two years and works as a photographer and creator.

Expenditures are divided into three categories: 50% for needs, 30% for wants, and 20% for savings.

Pranav lives in a four-bedroom terraced house in a location between Zones 1 and 2, with each person paying £950 in rent.

Gas and electricity bills range from £100-£120 during summer but increase significantly in winter due to the size of the house.

Water bills come every six months, and each person pays £10 per month.

The Wi-Fi costs £40 per month, and the phone bill costs £10 per month, both of which are split between housemates.

Grocery expenses are around £250 a month, divided between four people.

Pranav spends about £80 on transportation using TFL (Transport for London).

Council tax in their area is £155 per month, divided by four, which is a new concept for people moving to the UK.

Pranav saves money on food by getting free meals while shooting at restaurants.

Coffee in London can cost around £200 per month if bought daily, but Pranav saves money by using an espresso machine.

Uber One subscription saves Pranav money on rides and grocery deliveries, costing £6 per month.

Pranav saves 20% of his income, investing 10% in shares and sending 10% back home.

His Revolut bank account has been essential since he moved to London, providing convenience for managing finances.