Buying a house can be like walking on a moving escalator the wrong way, sometimes you don’t feel like you are getting anywhere fast. When we bought our first house together, we had the added stress that I was due with my first baby very soon. Not only were we trying to put a deposit down on the house we had had our eyes on for while but we needed to learn budgeting quick. A new house and a new baby together is expensive.
Whether you own a home or looking to save to buy a home, a household budget is very helpful. There are very complicated worksheet online but I think a very basic household budget can really guide you on your spending and saving habits. Many of us don’t realize how much we spend on the little things and those little things add up very quickly.
My basic household budget worksheet
Expenses | Monthly Amount Estimate | Monthly Amount Actual | Difference
Expenses: With four easy columns on a piece of paper you can write down all expenses that you incur each month. This includes all miscellaneous items such as Beauty, Starbucks coffee, Gifts or Charity donations, a day out with the girls, etc. Don’t forget those expenses that may be due only every six or twelve months. Divide them into monthly expenses by divided by 6 or 12 and put them in your monthly budget. It’s easier to set aside a little bit of money each month for those big bills like car insurance than to take it out all at once. Then you always know you have enough for it when the bill comes in.
Monthly Amount Estimate: Estimate what expense will cost so you can budget your money and know what you can and can’t spend extra. Don’t forget to always put a little away for savings each month especially if you are saving up to buy a new house. Or if you just have bought a house, it’s always a good idea to have savings on hand for unexpected things to go wrong. If you own a house you will know what I mean when that unexpected boiler that stopped working on the coldest week in winter need replaced.
Monthly Amount Actual: Here you write in what it actually cost you at the end of the month for each expense. Try keeping all your receipts for each month to help you tally up what you spent. Whenever I buy something I come home and throw it into my monthly envelope I have in my desk. It’s a great habit to get into that way you don’t have to search your bank accounts later to see what you spent. Especially if you are one of those that likes getting cash out of the ATM. You wouldn’t know what you spend the cash on if it were a few different things.
Difference: The difference column is a simple subtraction of your estimated amount and your actual amount. Showing you how well you are managing your budget. The more you do it the better you will be at estimate what you actually spend. Even better if you are estimating higher than your actual outgoings. Money in the bank is a good thing.
Overall if you write down your expenses that in itself is a great way to see where all your money goes. When I first started budgeting and wrote my first expense list I was shocked at how many items were miscellaneous. Clearly I was spending more than I should on the little things and whilst at the time they seem so very little they add up so quick. I just needed to learn to priortize what I needed and what I wanted. There is a huge difference between the two.
Tips on saving for your new home
Use a worksheet to budget your money: As I said above it’s important to know where your money is going. Do it for a few months and it will become second nature to you.
Always put money into savings each month: Obviously saving your money is the key to your new home be sure you are putting a little into it every month or as much as you can depending on when you want your new home.
Compare prices when shopping: Too often we buy for convenience and convenience cost money. Try shopping around for the best prices for food, clothes and always keep an eye out for sales on.
Use Store Clubcards and Rewards programs: I can’t stress it enough to use reward programs. I save my Tesco club vouchers all year and at Christmas they double the points so I always have enough at Christmas for all our Christmas food and our Christmas presents too! Last year, I had £800 to spend at Tesco for Christmas. That’s a lot! Most stores near you will have a rewards program. Sign up and get saving.
Reuse or revamp the old into the new: In a society that doesn’t like to keep anything, we are constantly throwing something out if it breaks or if its gone out of style or if we just don’t like it anymore. Upcycling is getting more popular which is great. We need to reuse and revamp things into new things and stop being wasteful and throwing it all away just to buy new. I recently wanted to redecorate my living room because I hated the look of it but there was nothing wrong with the items in the actual living room. I got resourceful. I sold old furniture and bought new furniture with the same money. I painted frames and knicknacks so I didn’t throw anything out. I changed the whole look of it and actually made money off the things I sold because I shopped around and bought new stuff on sale. By painting and just changing the pillow cushion colors I saved a fortune and got a whole new room for free! It’s about being creative and thinking outside the box. The dress may not fit like it used to but could you cut the bottom off and make a nice blouse! You never know what you might come up with.
It’s hard to save that big number for a deposit on a house. I know as we have been there ourselves. If you’re thinking of saving up for a home of your own but aren’t sure if it will be cheaper than renting, take a look at TSB’s mortgage repayment calculator to see how much your repayments would be. It might surprise you that you can afford it sooner than you thought. It will at least give you the guidance you need.
I hope you have found my tips of saving and my basic household budget worksheet handy too. Do you budget each month? Would love to hear what works best for you? Do you budget differently around the holidays? Comment below…
* This post is in collaboration with TSB