A first salary runs a home if the fixed costs are written down and taken out before anything else is spent. In a flat like mine that list is rent, council tax, energy, water, broadband, phone and the TV licence, and the useful bits are the rules around them: 25% off council tax if you live alone, a deposit capped at five weeks’ rent in England, and an energy price cap that limits the unit rate rather than the bill. Get those three right and the rest is arithmetic.
I had assumed rent was the bill and everything else was small change. It isn’t. Several of the others arrive as separate direct debits on separate days, and a couple of them, council tax especially, are amounts nobody warns you about until the first letter comes through the door.
The fixed costs, written down before the first month
The bills fall into two groups. The first group is the same every month whatever you do: rent, council tax, broadband, phone contract and the TV licence. The second group moves with how you live: energy, water if you’re on a meter, and food.
The fixed group goes in a single column, added up, and that total comes off the payslip first. What’s left is what you actually have, and knowing it on day one is better than finding out on day twenty-five.
The moving group needs a guess to start with and a correction after the first couple of months. Food is the one you control most directly, which is why one shop a week against a five-dinner plan is the easiest way to make that line predictable.
Council tax: 25% off if you live alone
This is the discount I didn’t know existed. GOV.UK says you’ll get 25% off your bill if you pay Council Tax and either you live on your own or everyone else in your home is disregarded. The discount isn’t applied automatically; you apply to the council for it. If you’ve moved into a place by yourself and haven’t done that, you’re paying a quarter more than you need to.
The same page says you’ll usually have to pay Council Tax if you’re 18 or over, and that spouses and partners who live together are jointly responsible for the bill. Jointly responsible means the council can ask either of you for the whole amount, so living with a partner, the council tax is not something one of you can quietly opt out of.
The disregarded list matters in a shared house. It includes people under 18, full-time students and some apprentices. If you’re working and your housemates are all full-time students, you may be the only person the council counts, which puts you in single-occupant territory for the discount. If two or more of you are working, there’s no discount and the bill is shared. The band decides the amount and bands vary by address, so check the council’s own page for the property.
Energy: what the price cap does and does not cap
I had assumed the energy price cap was a maximum bill. It isn’t. Ofgem’s explainer is blunt about it: the cap does not limit the cost of your total bill. The more energy you use, the higher your bill will be.
What it caps is the unit rate and the standing charge. For 1 October to 31 December 2026, Ofgem puts the cap at £1,723 per year for a typical dual-fuel household paying by Direct Debit. Underneath that headline the rates are electricity at 26.32 pence per kWh with a daily standing charge of 54.83 pence, and gas at 7.97 pence per kWh with a daily standing charge of 29.68 pence.
Two things follow from those numbers. The standing charges are paid every day whether or not anything is switched on, so a small flat with low use still has a floor under its bill. And the “typical household” figure is a household, not a one-bedroom flat with one person in it, so a small place will usually come in under it while a draughty shared house with five bedrooms and the heating on all day can come in well over. The only way to know is to read the meter.
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Deposits, holding deposits and the fees an agent cannot charge
The deposit is the biggest single payment at the start, and there are limits on it in England. The government’s How to Rent checklist says the maximum deposit is 5 weeks’ rent, rising to six weeks only if the annual rent is £50,000 or above, which is not a first-salary problem. A holding deposit, the amount you pay to take a place off the market while the paperwork happens, is capped at no more than one week’s rent.
The same checklist lists charges that are banned outright, including viewing fees, tenancy set-up fees, check-out fees and third-party fees. If an agent asks for any of those, the answer is no, and the checklist is the thing to point at. These rules are for England; Scotland and Wales have their own tenancy law, and I have not checked it here.
The deposit has to be put in a government-approved protection scheme and you should get a certificate saying where. That certificate, the tenancy agreement and the inventory need a home from the first week, which is what the four-folder filing system is for. The deposit comes back at the end only if you can show the place is as you found it, and the inventory is the evidence.
The small fixed bills people forget: TV licence, water, broadband
The TV licence is the one most people my age assume doesn’t apply to them. GOV.UK says a TV Licence costs £180 a year, and you need one if you watch or record live TV on any channel or service, or use BBC iPlayer. Streaming on demand without iPlayer is outside it; iPlayer on a laptop is inside it. Whether a shared house needs one licence or one per room depends on the tenancy, so check before assuming it is one cost split between everyone.
Water depends on whether the property has a meter. Without one you pay a fixed charge based on the property; with one you pay for what goes through. I’d find out which before the first bill rather than after, because it changes whether a long shower costs anything.
Broadband is a contract, so the thing to check is the length and what the price does when the introductory period ends. On a twelve-month tenancy, an eighteen-month contract is a cost that outlives the flat.
Splitting costs in a shared house, with a partner, or on your own
In a shared house the default is an equal split of everything except rent, which usually follows room size. The point that isn’t obvious is that whoever’s name is on the energy or broadband account is the person the supplier chases if it goes unpaid. Giving each housemate one account to hold spreads that risk. The rota for who pays what is worth writing down; from what friends in shared houses say, the bill nobody owns is the bill that becomes the argument.
Living with a partner, the two honest options are straight halves or a split in proportion to what each of you earns. Neither is wrong, but it should be a decision rather than a drift. Council tax, as above, is jointly your responsibility in law regardless of how you divide it between yourselves.
On your own there’s nobody to split with, and that changes what the numbers mean. Every fixed cost is yours, and a bill that’s higher than expected has nowhere else to land. The 25% council tax discount helps, but the bigger safeguard is a buffer: an amount set aside in the first month and left alone, so that one large energy bill in January doesn’t turn into a missed rent payment in February. How big the buffer needs to be depends on the fixed-cost total, which is why that column comes first.
What I would not bother with
I would not bother with a detailed budget for every category on day one. The fixed column is the bit that matters; the rest can be rough until two months of real bills have arrived and the guesses can be replaced.
I would not bother chasing the cheapest possible energy tariff before the first bill. The cap sets the ceiling on unit rates, and until you know your actual use the comparison is guesswork. Read the meter, get one real bill, then look.
And I would not skip the council tax discount application on the grounds that it’s a form. It’s a quarter of the bill, and it’s the single most useful thing I found while looking all of this up. More of the same kind of thing is in the organisation section.
