If you’re just about to move into your first home (or have recently picked up the keys), then big congratulations are in order! But you’re going to need to be a bit realistic too… Do you have a plan when it comes to managing your money? And are you sure you can stretch your pay packet far enough? Well, here are a handful of top tips for handling your money in your new home so that you can enjoy being a first time homeowner with as little stress as possible…
Prioritise your payments
You need a roof over your head, as well as water, electricity and central heating running through the property. So, from a practical perspective, these are the most important bills to pay first. From a financial perspective these are also the most important things too: falling behind on your mortgage and failing to pay your utility bills can both result in your credit score being negatively impacted. (If you’re really struggling to manage your finances and have ended up in debt already, think about switching to a lender with better deals, or opt for one that won’t turn you down for your credit score). So, prioritise your mortgage and utility bills first of all, as these are the most important.
Budget, budget, budget
Secondly, no homeowner should dream of picking up a set of keys to their new property without having drawn up a watertight budget first. Your budget needs to account for things like mortgage repayments, utility bills, council tax, television licenses, entertainment packages (including your internet bill), a weekly food budget and anything else related to running a home.
However, you also need to factor in other regular expenses, including things such as the cost of getting to and from work, your average monthly mobile phone bill, ‘fun’ money, and general essentials such as clothing and toiletries. Trawl through your bank statements if necessary, being realistic about what you actually spend and make sure you can cover the cost of everything based on your income.
One of the most effective ways to manage your money and make it stretch further as a young homeowner is to eat cheaply. If you’re lacking cooking skills, you might find that you’re buying a lot of ready meals: something that’s going to drain your bank account and expand your waistline! So, save money and ensure your diet is healthy by learning to cook from scratch, shopping at farmers’ markets and supermarkets that are great value for money, such as Aldi or Lidl. Buy in bulk, snap up bargains when items are reduced and invest in a good freezer so that you’ve plenty of space to store cheap and nutritious meals that you’ve made ahead of time.
Set up a repair fund
Whether you’re living in a new build property or one that’s much, much older, it’s likely you’re going to need to do some work to your house at some point. If you’re lucky, it will just be minor repair work, but be prepared for the fact that owning a property means being responsible for keeping the house standing! Set aside money into an account that you regularly pay in to, giving you a slush fund to dip into if the boiler breaks, the chimney needs repairing or damp needs sorting out.
Put away some money for general life expenses
Finally, there’s some other big things you need to save for, and it’s not your home itself: it’s all the stuff that’s happening elsewhere in your life. Dental work, car services and big events (such as getting married, having a family or going travelling) all need paying for, so it’s important that owning a home doesn’t swallow up absolutely all your income. Try to set aside some money every month (in a separate account to your ‘repair fund’) so that you can confidently cover the costs of expensive (but nonetheless expected) things such as car MOTs, holidays and social events.
If you follow all these tips, you’re far more likely to thrive in your new home. Good luck, and enjoy!