There are lots of apps out there that can help you budget. I use a simple spreadsheet to keep track of my spending. There are plenty of decent budget planners online you can use for free. For starters, try the one from the Money Advice Service or Halifax.
A ‘rainy day’ savings pot isn’t just for when the weather turns bad. An emergency stash of cash is really important for when things go wrong, like when your washing machine breaks, or your car breaks down. It can also tide you over if you lose your job or are too ill to work.
I hate to burst your bubble, but most of us aren’t ever going to get rich. At least not super yacht rich.
Instead, it’s best to start thinking about how much you’d actually need to feel rich. That’s different for everyone. Does your version of ‘rich’ mean you’ve enough money to buy a house, or just that you can go on holiday every year? When you start thinking like that, it becomes more achievable.
The smallest deposit you’ll need to get a mortgage is 5% of the total property price. The average UK house price is £231,095 – so the average deposit is at least £11,555.
Save more if you can. With a higher percentage deposit you could get a lower interest rate on your loan – that can save you thousands in the long term. I’d aim to save up for a deposit of 20% or more to be able to get the best deals.
But how? Well, ignore anyone who says just cutting out avocados on toast will do it. You do need to be smart about how you spend though. Shop around to get the best deals – from supermarket shopping to your mobile phone contract.
Cutting your rent is worth looking at too. That might mean moving to a less desirable spot in the short term, but it could be worth it.
Stamp Duty is likely to be your most expensive additional cost, though if you’re a first-time buyer in England, Northern Ireland or Scotland then you might be eligible for a discount. The rules on Stamp Duty are different depending on where you live – you can find out more here.
But Stamp Duty is not the only extra charge. There are a few others and they can add up. First, your mortgage could come with extra fees, and the lender will probably require you to pay for a valuation too.
When I moved house the next biggest costs were the legal fees which included all the paperwork, searches and the money transfer fee. You should shop around for a solicitor you’re happy with. There’s also a Land Registry fee to pay.
Finally, there’s the cost of a survey. The more you pay, the more detailed it will be.
If you can afford it, there are obvious benefits to getting on the property ladder. But that doesn’t mean that renting is bad.
In my opinion, the flexibility of renting is often undervalued. You’re able to move around at a moment’s notice, take career breaks or even go travelling. Stuff like that is harder to do when you have a mortgage to pay.
As much as you can! And start as early as you can!
It’s easy to track down your pension plans from previous jobs. You should get in touch with your old jobs. If you’re not sure of the contact details, then use the government’s pension tracing service. They’ll then give you details of whoever manages the pension, and you can contact them directly to get further information
Well, it’s a risk. If you own a property when you retire and you need the money, then you’ll have to sell your place and downsize. And that’s assuming you can sell.
Interest rates are decided by the Bank of England. They set something called the ‘base rate’. Put simply, a low base rate is good for borrowers but bad for savers. And vice versa.
Simple enough right? It can be a little bit more confusing in practice, in part down to how the rates are calculated. This is where terms like APR and AER come in. But once you know what they actually mean, things start to make more sense.
Ah, the golden question. Personally, it really helps me to have a goal so I’m motivated to prioritise. For example, it was easy to cut a lot of my spending when I knew that I was trying to save for my wedding. And once you’ve got into the habit, it’s easier to keep going.