Property Clinic August 19

Looking to move home but not sure what you can afford? Five top tips on creating a budget plan
Looking for a new home is such an exciting time and it can be easy to get carried away by all the lovely looking properties that are more than you can afford. It seems like that perfect flat or house is always just a little more than you were planning to spend…
By creating an accurate budget plan, you can firstly see what your current financial situation is and secondly look at ways to improve it to help you reach your goals .
It will take a bit of time to create a budget plan but as your home is probably the biggest asset you will ever own if you are buying, or your largest monthly expense if you are renting, it is important to get everything right.
Here are our five top tips to help you plan your budget
1. Getting organised
This is a great opportunity to set aside some time and go through those piles of paper to get your finances and paperwork in order. Find all the relevant information, including pay slips, details of bank accounts, savings, outgoings, credit cards etc.
2. Calculate your income
By combining your salary with any savings and investments you may have, you can work out your monthly income. Don’t forget to include dividends from shares, child benefit, child maintenance, pensions etc.
Some of your income may not be regular. If you use a spreadsheet on a computer you can document your expected income for each month of the year, allowing for any variations.
3. Calculate your outgoings
Having worked out how much you earn, it’s time to calculate how much you spend each month. This can be quite a surprise!
It is best to go through your bank statements, utility bills, credit card bills and any other expenses, and work out what your outgoings are. Try not to guess, as it is much better to have accurate figures when calculating a budget.
Think about all your spending including those things that you pay out less frequently –car servicing and MOT, Birthday presents, holidays, Christmas celebrations. Add these extra expenses into specific months of the year on your spreadsheet or add them all up and divide by 12 to give you an average figure to allow for.
4. Calculate the difference between the two
So now you know how much money is coming in and how much is going out, it’s time to see what’s left over. Take your annual and monthly expenditure totals away from your annual and monthly earnings…
Hopefully you will be left with a positive number which will tell you how much extra you can afford to spend each month on a new home. Obviously, if you have a negative figure, you are already spending more than you earn and you might need to re-think.
5. Create a realistic budget plan
Now you have a more accurate idea of your incomings and outgoings, you can start to think about how things could be improved. By setting financial budgets and goals, small savings here and there can really add up.
It is worth allocating set allowances for different expenses. You may be able to limit your spending in some areas; cut back on eating out, switch to a new utility company to save money, sort out a car share to work, take lunch to work rather than buy it ready-made each day…the list is endless.
When you are ready to take the plunge and find your new home, our friendly team will be on hand to help you. Pop in and see us in Bridge Street or call us on 01264 366611
