How to Budget for a Family Home that Won’t Break the Bank
While your small one-bedroomed flat might have been great for you and your partner when you were first getting together, that space can start to look small when you’re planning to start a family. There are a lot of different things you’ll need to think about when you’re budgeting for the arrival of a new addition, and one of the most important decisions you’ll need to make is whether you can afford to move into a bigger home.
Though the concept of moving somewhere larger might seem impossible, particularly when you’re planning on living with a single income for a while, you might be surprised at what you can afford when you dig into your budget and start making a few positive changes. The following tips will help you to find out whether you can budget for a bigger family property, without putting yourself into too much debt.
Step 1: Add Up Your Income and Check Your Expenses
Before you can support or rule out the idea of moving into a bigger home, you’ll need to figure out what you’re working with. The first step in any budgeting strategy is finding out how much money you have to spend. With that in mind, sit down and add up every source of income you have each month. If one of you isn’t going to be working for a while, then keep that in mind.
Once you’ve got a good idea of what you’re earning, you’ll be able to start checking out possible expenses. This will be useful, as you can assume that most of the bills you already pay, like gas, electricity, and council tax, will stay more-or-less the same when you move. The main thing that will be changing is the price of your rent or mortgage.
When you’re writing out everything you spend, make sure you separate each bill into different segments. This means that you should have a list of “necessary” expenses like bills, food, and clothing, and a list of “recreational” expenses too.
Step 2: Look at Where You Can Cut Back
Ultimately, deciding whether you can afford to move into a bigger house is as simple as figuring out whether you can move some money from one place in your budget, into a different section. In other words, you’ll want to see how much of your “recreation” money can be swapped over into your rent or mortgage money.
For instance, if you spend around £100 each month on coffee, meals out with the family, and drinks at the bar, and moving into another house would only cost you another £60 a month, then you can ask yourself whether you can cope with giving up on some of those luxuries – at least until both of you are working again, and then you can reassess your budget.
If you don’t have any obvious expenses you can cut back on, think about whether you could switch gas suppliers when you move to your new house to bring your energy bills down, or change your insurance provider. Sometimes switching a few bills around can be all it takes to free up some much-needed cash.
Step 3: Make Sure You Know How Much Your New Home Will Cost
Finally, before you make any decisions, make sure that you’re not working entirely on estimations. Speak to a mortgage broker or financial expert to find out how much a new and larger home is going to cost you. If you’ve already seen a bigger property that you like this will be easier, as you should be able to calculate things like the cost of the rent, mortgage, or council tax just by doing a little bit of digging online.
Remember to factor in any extra factors that might come into play. For instance, if you’re moving into a house that’s more expensive, but that property is also close to work, how much will you save on petrol costs each month? At the same time, are you going to need to pay extra money into looking after a garden that you didn’t have when you were living in a flat? Is the new house more energy efficient, so can you save more on electricity and gas?
The more information you have about the new home you want to live in, the better. Sometimes, you may discover that moving into a bigger property isn’t anywhere near as expensive as you thought when you take all of the different factors into consideration.
This is a collaborative post.