saving for a house move.
It’s important to be aware and in control of your financial situation, but it can be challenging to make changes in this area of your life. For me, the change came when I was looking at moving house, as this meant I needed to improve my finances, build up some savings and work to a budget.
If you’re saving with a deadline, it’s important to be sure of how much money you need to put aside. You need to allow for any upfront costs as well as a bit of a ‘buffer’ amount, should something unexpected happen. Last year taught us all a lot about that!
One way to start saving is by putting all leftover cash aside at the end of the day, or setting a certain amount aside in cash each week. It’s so easy to view your finances digitally, and move money back and forth between accounts. By putting the physical cash away, it makes you think twice before dipping into it. Sometimes you almost forget it’s there, which makes for a nice surprise when it starts mounting up.
When working out a budget it’s important to consider your income vs expenditure. I find that it helps to write lists. Your income is any regular payment you receive and can expect to continue to receive; it could be a salary, an allowance from family or it might be a benefit or statutory pay from the government. I receive statutory maternity pay, which is the same amount every month.
If you’re working out a new budget, you need to remember to include all outgoings, no matter how small or casual. For instance, if you like to get a takeaway coffee & sandwich once a week, you might be spending just under £10, but in a month that’s £40, and in a year that is £480! It’s ok to spend your money on things like this, if you can afford it, but it’s really important to include it in your calculations so that you don’t fall short in other areas.
When moving house, I created a list of all mandatory outgoings. This included rent, council tax and a rough estimate of utility bills such as gas, electricity and water - you can get an idea of the cost of these using price comparison sites. Next is working out the amount you spend on food, petrol and car outgoings (such as insurance, tax and maintenance). The total amount is put into a bills account each week or month. Any leftover money can be used on less important expenses, such as, TV subscriptions, holidays and clothes, reducing these where possible or necessary. Pay bills first, as they’re the most important, you can then make decisions on other spendings based on what’s leftover.
Hopefully my outgoings give you an idea of what things you need to bear in mind. Of course, this will be different for everyone. If you live in a city with little need to travel far you might not need a car and that would be a big reduction in outgoings. Another outgoing that may not be necessary is a TV license. These are required if you watch any kind of live TV, even if this is on a computer or tablet. If you only use subscription services and never watch iPlayer or live TV, you may not need a TV license. If so, you will need to make a declaration confirming this.
Some utility companies may allow you to choose the frequency of your payments, this might be quarterly or monthly. You should also be able to choose whether you set up a direct debit or stick to manual payments. Bear in mind that by choosing a pay monthly option, sometimes you may be charged a fee, so make sure you always read the breakdown to avoid extra charges.
A monthly direct debit means the money is collected on a set date each month, the amount can be fixed or variable. It is important to consider what will work best for you, and think about how you get paid when making this decision. If you get paid monthly, you may prefer a direct debit to leave your account on the same day every month. However, if you get paid 4-weekly, you may opt to make manual payments as you receive a bill. Be careful not to miss a payment, as this can affect your credit rating and stop you from borrowing in the future.
reducing your outgoings.
There’s a number of small changes you can make to reduce your outgoings. A massive way to save on food is by using budget, non-branded shops, like Aldi and Lidl. I’ve found when buying things like meat from these shops, it’s best to freeze them on the day of purchase and defrost when needed, to ensure it’s still fresh.
I like to plan meals in a way that makes the most out of my ingredients. For example, having a roast chicken, and then having another chicken based meal the next day, using any leftover meat from the roast. This minimises waste as well, so it’s great! I always take a shopping list with me, and I know roughly how much this list should cost. If I can afford to, I treat myself to a few things that aren’t on the list.
It can be beneficial to cook in larger quantities and then freeze a couple of portions. This can be done with loads of things, such as, bolognese, pasta bake, casseroles and pie mix. Another way to save on food is by making packed lunches, and buying things in big packets rather than individual portions. Even things like cans of soft drink can cost so much more than a large bottle of the same variety.
I saved money on my utility bills by using price comparison websites. You can also save money on your broadband packages like this too. It’s important to keep a note of when your contract ends, as often the price will increase, so it might be a good idea to switch suppliers - taking advantage of new customer offers.
Another way to reduce your outgoings is to make sure you aren’t signed up to any subscriptions you don’t need, and remember to cancel any free trials you use but can’t afford. Small things like this can add up, and if you’re not aware of what you’ve signed up to you may be paying it for a long time before you realise.