Wealth Check: 'I don't have enough spending money'

Stephanie Witt, 26, from Southend-on-Sea, Essex, is a furniture buyer for Harrod's. Despite having a respectable salary and recent pay rise, saving for her wedding means she has little money left at the end of each month.

She is already on the property ladder and has no debt other than her mortgage and student loan, so Stephanie recognises that she is in a good position compared to many other people of her age, but she struggles with her spending money.

"Inflation is a concern for myself and many other people at present – food and petrol are far more expensive than a year ago. My fiancé and I have adjusted our spending habits slightly but still find that we have little disposable income left after paying for the essentials," Stephanie says.

Case notes

Stephanie Witt, 26, Southend-on-Sea
Income: £24,000.
Monthly spending: £350 on her mortgage, £400 on living expenses, her tax and NICs bill is £450 and £100 goes on insurance.
Savings: Stephanie saves £250 every month into a fixed-rate ISA
Pension: No pension yet, but wants to retire at 55 on £24,000 a year.
Property: Owns a two-bed flat
Debts: Mortgage and student loan.

Three financial advisers talk Stephanie through her financial situation this week: Anna Sofat of Addidi Wealth Manage-ment; Chris Wicks of N-Trust Limited; and Mike Pendergast of Zen Financial Services.

Making ends meet

Stephanie is struggling to make her money stretch to suit her lifestyle. But Anna Sofat suggests that she can do a number of things to cut down.

First, she suggests Stephanie should take control of work-related costs because spending on little things can build up quickly. For example, she could take a packed lunch to work and have a fixed time each week for treats such as a Friday morning latte. She should also review her travelling costs and see if her employer provides an interest-free or low-interest season ticket loan. Alternatively, she could look into coach travel, because although it might mean early starts, it could be cost saving.

Sofat recommends that Stephanie creates a budget for social spending and has a planned calendar to make it easier not only to fund activities, but as a reminder of events to look forward to. While these cost-saving methods are important, Sofat insists that Stephanie should not feel guilty about treating herself. "Save a few pounds each week for personal treats – clothes are one item where prices have not really increased. It's important to feel good today as well as save for tomorrow."

Wicks suggests that Stephanie should shop around to see whether she could change utility, household and motor insurance providers and also look into switching to a cheaper mortgage rate.

Wicks adds: "It may be worth investigating an offset mortgage, which effectively combines a deposit and current account with your mortgage. You do not pay any interest on the element covered by the deposit and current account. This not only reduces how much interest you pay but it can also result in your mortgage being paid off earlier."


Ideally, Stephanie wishes to retire at the age of 55 with a gross income of £2,000 per month. Wicks says that she should start saving for retirement sooner rather than later if she wants to retire on this income, as considering she is reluctant to take a risk, that is looking unlikely to achieve. "Stephanie's options are to reduce the targeted level of income, adopt a higher level of risk or put her retirement back to a later age," he says.

Sofat suggests that Stephanie should plan for a retirement age of 60. "She should start saving into her pension after the wedding. Look into a company pension scheme, and if there is not one she could look at a stakeholder pension. She should look to save about 10 per cent of her earnings into a pension and increase this by 0.5 per cent per annum."

Mortgage & protection

Stephanie has critical illness cover with her mortgage provider, but Pendergast says she should also check that she has life cover with them. Most critical illness policies include this. "Also ensure that if either you or your partner died or suffered a critical illness, the other could survive financially," he adds. "Check that the provider you have your cover with offers the best deal, as the difference between the cheapest and most expensive providers can be 50 per cent of the premium."

Savings & investment

Stephanie is "risk averse", preferring stable investments such as gilts or bonds to volatile investments such as equities investing in emerging markets. Pendergast says it is advisable to take a more medium-risk approach to investment, as gilts and cash deposits will grow at a lower rate over the long term compared to equities. He adds: "We'd always recommend that you carry out a risk-profiling exercise with an independent financial adviser, as this will mean that funds and investments can be chosen that match your risk profile and also ensure you have the best possible chance of achieving your financial goals."

For a free financial check-up, write to Wealth Check, The Independent, 191 Marsh Wall, London E14 9RS; or email cash@independent.co.uk

Independent Partners; request a free guide on NISAs from Hargreaves Lansdown

The data shows that the number of “unlawfully” large infant classes has doubled in the last 12 months alone
i100Mike Stuchbery, a teacher in Great Yarmouth, said he received abuse
Arts and Entertainment
The starship in Star Wars: The Force Awakens
filmsThe first glimpse of JJ Abrams' new film has been released online
Rio Ferdinand returns for QPR
sportRio Ferdinand returns from his three-game suspension today
The Speaker of the House will takes his turn as guest editor of the Today programme
arts + ents

Watch the spoof Thanksgiving segment filmed for Live!
Billy Twelvetrees will start for England against Australia tomorrow with Owen Farrell dropping to the bench
rugbyEngland need a victory against Australia today
Arts and Entertainment
The cover of The Guest Cat – expect to see it everywhere
Tyson Fury poses outside the Imperial War Museum in south London ahead of his fight against Dereck Chisora
boxingAll British heavyweight clash gets underway on Saturday night
i100 Charity collates series of videos that show acts of kindness to animals
Finacial products from our partners
Property search
Latest stories from i100
Have you tried new the Independent Digital Edition apps?
Independent Dating

By clicking 'Search' you
are agreeing to our
Terms of Use.

ES Rentals

    iJobs Job Widget
    iJobs Money & Business

    Austen Lloyd: Company Secretary

    Excellent Package: Austen Lloyd: EAST ANGLIA - SENIOR SOLICITOR LEVEL ROLE** -...

    Citifocus Ltd: German Speaking Client Specialist

    £Attractive Package: Citifocus Ltd: Prestigious asset management house seeks a...

    Citifocus Ltd: Performance & Risk Oversight

    £Negotiable: Citifocus Ltd: This is a varied role focusing on the firm's mutua...

    h2 Recruit Ltd: Sales Director - SaaS (SME/Channel) - £140,000 OTE

    £90000 - £140000 per annum + benefits: h2 Recruit Ltd: Are you a high achievin...

    Day In a Page

    Homeless Veterans Christmas Appeal: ‘We give them hope. They come to us when no one else can help’

    Christmas Appeal

    Meet the charity giving homeless veterans hope – and who they turn to when no one else can help
    Should doctors and patients learn to plan humane, happier endings rather than trying to prolong life?

    Is it always right to try to prolong life?

    Most of us would prefer to die in our own beds, with our families beside us. But, as a GP, Margaret McCartney sees too many end their days in a medicalised battle
    Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night - is that what it takes for women to get to the top?

    What does it take for women to get to the top?

    Thomas Cook's outgoing boss Harriet Green got by on four hours sleep a night and told women they had to do more if they wanted to get on
    Christmas jumper craze: Inside the UK factory behind this year's multicultural must-have

    Knitting pretty: British Christmas Jumpers

    Simmy Richman visits Jack Masters, the company behind this year's multicultural must-have
    French chefs have launched a campaign to end violence in kitchens - should British restaurants follow suit?

    French chefs campaign against bullying

    A group of top chefs signed a manifesto against violence in kitchens following the sacking of a chef at a Paris restaurant for scalding his kitchen assistant with a white-hot spoon
    Radio 4 to broadcast 10-hour War and Peace on New Year's Day as Controller warns of cuts

    Just what you need on a New Year hangover...

    Radio 4 to broadcast 10-hour adaptation of War and Peace on first day of 2015
    Cuba set to stage its first US musical in 50 years

    Cuba to stage first US musical in 50 years

    Claire Allfree finds out if the new production of Rent will hit the right note in Havana
    Christmas 2014: 10 best educational toys

    Learn and play: 10 best educational toys

    Of course you want them to have fun, but even better if they can learn at the same time
    Paul Scholes column: I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season

    Paul Scholes column

    I like Brendan Rodgers as a manager but Liverpool seem to be going backwards not forwards this season
    Lewis Moody column: Stuart Lancaster has made all the right calls – now England must deliver

    Lewis Moody: Lancaster has made all the right calls – now England must deliver

    So what must the red-rose do differently? They have to take the points on offer 
    Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

    Cameron, Miliband and Clegg join forces for Homeless Veterans campaign

    It's in all our interests to look after servicemen and women who fall on hard times, say party leaders
    Millionaire Sol Campbell wades into wealthy backlash against Labour's mansion tax

    Sol Campbell cries foul at Labour's mansion tax

    The former England defender joins Myleene Klass, Griff Rhys Jones and Melvyn Bragg in criticising proposals
    Nicolas Sarkozy returns: The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?

    Sarkozy returns

    The ex-President is preparing to fight for the leadership of France's main opposition party – but will he win big enough?
    Is the criticism of Ed Miliband a coded form of anti-Semitism?

    Is the criticism of Miliband anti-Semitic?

    Attacks on the Labour leader have coalesced around a sense that he is different, weird, a man apart. But is the criticism more sinister?
    Ouija boards are the must-have gift this Christmas, fuelled by a schlock horror film

    Ouija boards are the must-have festive gift

    Simon Usborne explores the appeal - and mysteries - of a century-old parlour game