This can be one of the more stressful aspects to moving overseas, especially if you’re like me and have lived the good life for a little too long and left all your saving until the last minute!
Due to my (lack of) savings, I have had to put myself on a seriously strict budget leading up to my move.
This includes an impressively in-depth excel spreadsheet summarising my earnings vs. outgoings and projected savings and expenses. I have also been using my iPhone to note down every single dollar that I spend and keep a running budget balance so I know exactly how many more bottles of wine I can afford to buy before the next pay day 😉
I have also put together a list of sources that I expect to get a significant income from over the next couple of months. This includes:
- Selling car
- Selling household items & unwanted clothing
- Annual leave payout from work
- Rental bond refund
- Tax Return
Try to put together a list of things that you can sell to generate some extra income, you’ll be surprised with what you come up with!
It is important when planning your expected income to ensure that you always underestimate what you’re expecting to earn. This way you can better plan your savings, and if you do get a little extra than budgeted then this is a lovely bonus!
How much money should you take with you?
I am aiming to take around AUD$8,000 – $10,000 with me to London.
*Update: This was more than enough for me. I spent the most money in the first month – mainly on going out, eating out and enjoying life a little too much. After that, I settled down a little to keep funds aside for rent, deposits, holidays and general savings. I spent probably $5000 in my first 2 months in London, including a holiday to Italy, before I got my first pay cheque from work (they mainly pay monthly here – at the end of the month).
When deciding how much start up money you’ll need, there are a few factors that you need to take into consideration:
When you first arrive in London, it is likely that you will have to fork out some money on a place to stay, whether that be couch surfing (A.KA. ‘dossing’) at a friends house, or staying at a hostel or hotel until you settle in to a more permanent dwelling. Expect to pay around £5 p/night for couch surfing, around £15-40 p/night for a hostel, or anywhere up to £100 p/night for a decent hotel.
You will need money for basic items that you probably couldn’t fit in your suitcase such as toiletries, bedding, towels and a bottle of celebratory champagne! I had originally budgeted £50 for this, however bedding alone cost £150 all up (for a good duvet, pillows, sheets, covers, cushions) so in total I would suggest you set aside about £200 for the basics.
If you’re not willing to settle on just ‘any job’ to get you by and you want to wait for the right position to come along, you’ll want at least 2-3 months spending money as back up while you search for the perfect opportunity. This takes some of the pressure off finding something right away, and you can be more picky! We all vary with our lifestyle costs, but I’m aiming to cover the basic rental costs of around £100 p/week plus around £150 p/week spending money. So this totals to about £1600 for eight weeks of unemployment. It’s also worthwhile noting that you will spend a LOT more money when you first get here just on food, travel and shopping, so £100 per week can be quite hard until you settle down a little.
The general London rental market requires you to pay a month’s rent in advance, and leave an upfront bond equal to 1-2 months rent. This means you should be prepared to pay 3 months rent upfront. Some real estate agencies also charge you an administration fee which is usually around £150-200.
- Once you find a flat to rent, you may be faced with some upfront costs to set up your utilities, internet and phone, pay council taxes and buy any essential household items that you may be missing. This is why I suggest that for your first home, you should move into a share place where all of this is already up and running (and it’s a great way to meet new people too!)
London has a very superior transport system in comparison to anywhere in Australia. With the overground, underground and bus networks you can always get to where you need to go without a car. The most cost-efficient way of travelling is to purchase an Oyster Card as soon as you arrive. This is much cheaper than the old paper ticketing system, and more efficient too. It costs £5 but if you ever want to hand the card back then the £5 is refundable.
A one-way trip within Zone 1 on the Oyster card will set you back £2 as apposed to a heftier £4.30 if you’re paying by cash. Click here for a full list of 2012 London Transport prices. Your first weeks in London may get expensive as you navigate where the best places to eat and shop are. Transport costs can be high as you house and job hunt, and you’ll want some spending money to keep social too! I suggest you buy a Weekly Zone 1-2 pass on your Oyster Card as it’s much better value if you find yourself travelling each day.
Let’s summarise the costs so we can get a rough indication of the start-up budget.
The following figures are based on what I see as being my worst-case scenario of being unemployed for two months and not finding permanent rental for the first month.
Accommodation £840 (4 weeks at an average hostel at £30p/night)
Basic Needs £200
Spending Money £1200 (spending £150 p/week for 8 weeks)
Rental Bond £1000 (max two months rent at £450p/month plus agency fees)
Rent £450 (one months rent)
Transport £232 (£29 p/week for 8 weeks)
Total £3922 (AUD$6100 approx.)
Depending on your lifestyle and preferences, everyone will have a different budget need.
To get a good idea of how much some basic good and services cost in London, check out my London Prices page. Many prices with the Australian exchange rate are very cheap, but keep in mind that average salaries here are also a lower, so it’s all relative.
I updated the figures on this budget after I actually moved to London so this is a great estimation as of Mid-2012. I did however spend a lot more money on shopping and replacing my wardrobe, as well as eating out, than originally planned, however once you get a job and settle in to a routine, it’s much easier to monitor your everyday spending.
Please let me know if you have any questions.
The London New Girl