Once upon a time I was a mortgage advisor. I did it for several years, and I loved it. It was an incredibly rewarding role, people purchasing a home that they had fallen in love with, would fill me with amazingly positive vibes. I think my favourite kinds of meeting would be either first time buyers or forever home buyers. They tended to be at two ends of the spectrum in terms of budgeting knowledge, but I always tried to give them as much advice as I possibly could, when it came to budgeting and household expenses.
If I could give any gem of advice it would be to complete a monthly budget planner. If you are either trying to save a deposit for a new house, or trying to figure out if you can actually afford to move you really need to know your income and expenditure. You can get really comprehensive and FREE monthly budget planners online, to help you to do this.
Saving a deposit for a home.
Homework: Sit down, with all of your bank account and savings details, and write everything…and I really do mean everything down that goes out of your account. Think monthly, but also weekly and yearly too, so you don’t forget anything. If every year you take a holiday, include that, as well as things like travel expenses, and taxing the car for example. Don’t forget Christmas and Birthdays too. For a successful budget planner, you really do need to include all of your outgoings. Then look at what you have coming in, and take one from the other to work out your what money you have left, that potentially you could save.
Break it down: With this yearly figure, break it down to months, or even weeks to then think how much of it you can save. A word of warning though, be conservative, the worst thing you can do, it set yourself up for a fall right from the start. If you do find you can save more, then that is even better news, and will help to keep the momentum and positivity going.
Where can you save?: You also should look at the planner and see where you can save money. It may seem a cliché, but if you see that every day you buy lunch out, and grab a takeaway coffee each morning, this can easily add up to £5-10 every day of extra spending. With small changes you could easily save up to £2,500 in a year! Also look at contracts and even loan payments, and see if there are better rates available.
Reward yourself: This should not feel like hardship to be successful. Give yourself a reward for hitting a target. It doesn’t need to cost much, or anything at all.
Junk mail diet : This for me was something I found incredibly helpful. I went through my email box, and unsubscribed to all of the emails that I received, that I knew come pay-day would be tempting me to splurge. Out of sight, out of mind!
Keep the faith : If this is what you really want to do, then set up reminders for yourself, so that old habits don’t start creeping in. A pin board or front of the fridge with house details on. A note in your purse or wallet. Even a post it on your credit card. Remind yourself why you are saving for your future new home.
Once you have saved up enough money for a deposit and for fees, that’s when the real fun starts. You do need however to start the whole budget planning again, this time with your new home in mind. If you are at this stage, then take a look at TSB’s mortgage repayment calculator to see how much your repayments would be. This will give you a clear idea, of affordability month to month.
Good luck in your new home!