Knowing where you stand with your budget, so you know how soon you can save up a house deposit and what you can afford in terms of mortgage repayments, as well as other costs associated with buying and owning a home.
To work this out you will need to start by tracking and assessing your income and expenses.
Here are some guidelines for tracking your budget.
Calculate your total income:
- Work out the total net (after tax) income of all people contributing to the mortgage
- Identify any other sources of income: support payments, dividends, bonuses etc.
Add these together to calculate your total income
Calculate your expenses:
- Rent or mortgage payments
- Car or other loan repayments
- Car maintenance
- House insurance/car insurance
- Health insurance
- Utilities (electricity, gas, phone, internet)
- Credit card repayments
- Weekly groceries
- Child care costs
- Clothing, household purchases and personal care
- Entertainment and Eating out
Make a realistic projection of these (go through your bank statements if necessary) and add all together to work out your total expenses
Your total income minus your total expenses is what you have left in your budget to put towards buying a house.