Budgeting is an essential part of life, but it is even more important when you are a new homeowner. It’s common for new homeowners to underestimate the cost of living in a home and they often find themselves in financial trouble. Make sure you are ahead of the game and know how to budget.
This article will help you with some tips on how to budget as a new homeowner and how to plan for your monthly expenses. Two really easy starting points:
1) Work out your income
It’s important to know your income before you start planning your expenses because if you don’t know what your monthly income is, then it will be difficult for you to set up a budget that will work for you. Take into account any joint income too, if there are two of you.
2) Work out your expenses
Make a list of all the things you currently pay for. Check your online banking for direct debits that only come out every three months. Mortgage, energy bills, phone, council tax. Internet, tv packages, charity donations – everything!
Then you can see how much you have left for food shopping, clothes, holidays. Very often, at first you won’t have any spare for luxuries, but you should always try to work out a budget that will enable you to save a set amount per month that you can use if you need to. Remember to allocate an amount to birthdays, Christmas, Netflix. This is your time to check out what you really need – cancel unwanted subscriptions or charity donations until you can afford them again.
Budgeting is a great skill to pick up, you can learn more here.
Work out any debts
When you are in debt, the last thing you want to do is add more debt. The best way to get out of debt is to consolidate your debts into one monthly payment that is manageable. It can be difficult to know where to start when it comes to consolidating your debts.
Debt consolidation tips:
-Consolidate all of your unsecured debts into one monthly payment with a low interest rate.
-If possible, avoid taking on any new loan or credit
Energy bills are a major expense for households. It is essential to reduce energy usage and find ways to save money on the bills. At the moment, energy is at an all time high, and everyone will be spending more.
There are many easy ways to save money on your energy bill. Turning off lights when you leave a room, unplugging appliances when not in use, setting the thermostat at 18 or less, and layering up instead of putting the heating on.
Saving money on energy bills is a big concern for many people. It is important to know how much we spend and where we can save.
The first thing we need to do is to calculate our total energy use for the year and then see where we can cut back and save money. For example, if you have a large family, you may want to consider changing your washing machine or dishwasher from an energy-efficient one to a more expensive one that will use less water and electricity. You may also want to consider installing solar panels on your roof or switching over to LED light bulbs.