Setting up a budget for first home

BadlyDrawnGirl_2

Hi there,

My partner and I will be moving to Cardiff shortly, and it will be the first time we've really "settled down" since we met in New Zealand three years ago. We've been travelling and working in temp jobs, but have finally decided to both go back to school. We both start this September, but my programme allows me to study part time in the evenings for the first year, while he's going full-time straight away. Anyway, it means that we will finally be actually staying in the same place for several years, so I'm really determined to get our financial lives sorted out now that we have the time to do so!

Neither of us have ever been particularly good at money, so the prospect of us both being in full-time education (i.e. with no income coming in, although I will be getting an NHS bursary) is sort of frightening, hence why I want to get things planned out while I still have time. I've been trying to work out a budget ahead of time, but it's proving difficult to estimate things before we've actually seen the first wave of bills come in. Does anybody have any good advice for setting up a budget prior to moving into their first home? The last flat we lived in had everything included in it - all utilities, plus Internet - so I really have no idea how much we can expect to pay for these things. I also have no idea how the whole council tax thing works, whether we can expect to get any discounts on it due to being in school, etc. (Sorry, I wasn't entirely sure which forum to post this in - please feel free to move!)

Many thanks for any advice!

littlebird22

If everyone in the household is in fill time education then you don't pay council tax. (I'm not sure how this will work for part time study but someone else may be able to clarify. It may be that you only get discount for your partner and you have to pay some council tax for the first year)

I'm still living in uni accomodation so I can't really advise re utility bills but in terms of food budgeting get yourself over to the Moneysaving Old Style board for some great tips.

I would really encourage your partner (I know that with your course being vocational it will be difficult for you) to try and get a part time job. It is much better to work in first year whilst you still have a reasonable amount of spare time on your hands and then be able to give up your job later than to have a relaxing first year and be forced to take a job at the end of your degree when there are serious dissertation pressures and the work is considerably more difficult.

cymrubaby

BadlyDrawnGirl wrote: »

Hi there,

My partner and I will be moving to Cardiff shortly, and it will be the first time we've really "settled down" since we met in New Zealand three years ago. We've been travelling and working in temp jobs, but have finally decided to both go back to school. We both start this September, but my programme allows me to study part time in the evenings for the first year, while he's going full-time straight away. Anyway, it means that we will finally be actually staying in the same place for several years, so I'm really determined to get our financial lives sorted out now that we have the time to do so!

Neither of us have ever been particularly good at money, so the prospect of us both being in full-time education (i.e. with no income coming in, although I will be getting an NHS bursary) is sort of frightening, hence why I want to get things planned out while I still have time. I've been trying to work out a budget ahead of time, but it's proving difficult to estimate things before we've actually seen the first wave of bills come in. Does anybody have any good advice for setting up a budget prior to moving into their first home? The last flat we lived in had everything included in it - all utilities, plus Internet - so I really have no idea how much we can expect to pay for these things. I also have no idea how the whole council tax thing works, whether we can expect to get any discounts on it due to being in school, etc. (Sorry, I wasn't entirely sure which forum to post this in - please feel free to move!)

Many thanks for any advice!

Try to pay all your utilities by direct debit and really look for the cheapest supplier of them - you often get the best deals by paying monthly direct debit. Set them up for the 28th of the month for example and then put money aside each week so that at the end of the month you have the money to pay them. My husband and I set up a linked account to our current account and we just transfer a portion of money each week into the linked account and when the direct debits are due out we then transfer all our saved up money back to our current account a day or two before the direct debits are due out and then pay it all that way.

We live in a 3 bed home and our gas and electricity are £135 a month (for us and 4 kids) and our water is £42.50 a month (we have a meter much to my annoyance). Our TV, broadband and phone all come from the same supplier and cost us approx £75 a month. Our food shopping is usually £100 a week. With just two of you I am sure it will be much less.

There's a budget planner on this website and that's really good if you have some rough figures worked out. For the first few months try to overestimate what you will be paying for your utilities until you see a pattern emerging. You'll see how much you're using with regard to gas/electricity and water with your next bills (after you've set up your new accounts with them). You could offer the gas and electricity company say £40 a month for each of them and offer to set up your water for around £30 a month (I live in Wales too). By the time your next bills come through you will see if you're paying too much and you can either keep overpaying and have a rebate or you can adjust your direct debit amounts accordingly. You will probably find that your gas and electricity bills will increase each quarter through the winter months andf then start decreasing again by next spring/summer when you use your heating and appliances less.

You will also need to arrange to pay your TV Licence which I pay monthly by direct debit and sort out contents insurance - mine is only £5 a month. www.confused.com and www.comparethemarket.com are good for searching for insurance deals. www.uswitch.com is good for utility supplier comparisons. If you're renting your landlord should already have buildings insurance but check to see whether he has contents insurance on your property or whether you have to get your own.

Hope some of this info helps you.

BadlyDrawnGirl_2

Wow, thanks for all the great advice! I really appreciate it, especially the tips on overestimating the utility bills...although I always get suspicious when I pay a company too much money as I don't expect to ever get it back in the end. But I would imagine it would be difficult to pay bills by direct debit if you didn't set it up for a standard amount each month.

As for electricity, we will both be out of the house all day every weekday and most of the weekend as well so the only power we would be using would be from the TV mainly, our computer, and anything else heated by electricity (I hope to god we have a gas stove this time around! I hate cooking on electric). Is gas and electric normally supplied by the same provider?

I'm not sure how it works here, but when we were living in New Zealand we could opt to either pay a flat rate (that was based on an estimate of how much power our particular property should use a month) or the actual meter rate every month. We opted for the flat rate and it actually worked out cheaper than what we were actually probably using! Do you have to get a meter reading in the UK?

Also, the idea of a TV license kind of confuses me (I'm not originally from the UK, we don't have anything like it in the States). If you subscribe to basic Sky for example - does that fee include the price of the TV license? If not, do you have to pay that every month or is it a yearly or one-off fee?

Finally (on the subject of bills), I always used to find - at least in NYC, the Land of the Expensive - that companies which offered combined package deals on phone, TV and Internet often worked out to be way cheaper. Is that the same case with Sky or any other similar providers? Or am I better off getting the TV through Sky and broadband through BT?

As for employment, I'm definitely going to try and get him to get a part-time job during his Access course, as the class hours are only about 25 per week. Next year, he'll be switching to a Paramedic Science course in Swansea, so with the commuting and everything a job is probably out. Thankfully though, I actually have two full years before I start (turns out I can't start the NHS course until 2011 due to residency requirements), so that's at least two years where one of us is in full-time work.

Anyway thanks again for all your help and suggestions!

atypical

BadlyDrawnGirl wrote: »

Is gas and electric normally supplied by the same provider?

It is cheaper (but not necessary) to get your gas and electricity from the same supplier under the name of 'dual fuel' or some other epithet, try a comparison site like this one.

BadlyDrawnGirl wrote: »

Do you have to get a meter reading in the UK?

You always pay for the amount of energy you use, so yes you have to work off a meter reading.

BadlyDrawnGirl wrote: »

If you subscribe to basic Sky for example - does that fee include the price of the TV license? If not, do you have to pay that every month or is it a yearly or one-off fee?

A Sky package does not include the cost of the TV Licence which costs £142.50 a year for a colour TV. You can pay this all in one go or spread it across the months or quaters, more info here.

BadlyDrawnGirl wrote: »

companies which offered combined package deals on phone, TV and Internet often worked out to be way cheaper. Is that the same case with Sky or any other similar providers? Or am I better off getting the TV through Sky and broadband through BT?

Buying a combined package will work out cheaper. If you have a Sky package you are probably best also getting internet with them which ranges from free to £10 a month extra. Don't forget that you have to pay line rental of £11.25 a month to BT or £10 to Sky in addition to this.

Fire_Fox

Our bills per month for a two bedroom flat, split between two:
Council tax £65
Electricity £34 (gas is not common in flats)
Water £7 (metered)
TV license £12
Contents insurance £10
Mobile internet £15 (no landline)
Food/ cleaning products/ toiletries £200

Total £340 or £170 each a month or £40 each a week. Note that I keep a close eye on all of this - I shop alone with a list, I read the electricity meter regularly and we only heat the living area in winter (electric blanket on bed!). It's not how much you are home that affects your energy bills, it's how many hours a day/ days a week/ months a year you use the heating for.

I don't agree that a combined package is cheaper - you are getting stuff you don't need! Freeview is great, you should be studying and working not watching TV. You will need to get an 18 month contract with BT if you want a landline, I don't miss not having one but I have negotiated free unlimited calls to landlines on my mobile so can ring the parents.

If you hate cooking on an electric hob see if you can find a place with an induction hob, Mr. Fire Fox is a chef and he agrees it's almost as good as gas.

atypical

Fire_Fox wrote: »

I don't agree that a combined package is cheaper - you are getting stuff you don't need! Freeview is great, you should be studying and working not watching TV. You will need to get an 18 month contract with BT if you want a landline, I don't miss not having one but I have negotiated free unlimited calls to landlines on my mobile so can ring the parents.

I was working on the assumption that the OP wanted Sky. I agree with you, Sky isn't much needed if you have Freeview.

If there is an existing landline in the house then there is no 18 month contract with BT but there is likely to be at least a 12 month contract with the ISP.

cymrubaby

I don't have Sky - I have Virgin. They seem to work out cheaper for me than having BT and Sky separately. BT was costing me £120 a quarter and my Sky TV package was around £45 a month and my broadband was £10 a month which works out at roughly £95 a month altogether.

I have a bigger TV package with Virgin, plus lots of inclusive calls and broadband and my bills are never more than £80 a month. It may only be £15 a month cheaper but I get more for my money and it saves me around £180 a year.

If there are only two people in the household then I agree that Freeview offers the best value - being free. BUT I do find BT expensive and the initial contract being 18 months seems a long time to be tied in. I always found BT had hidden costs but perhaps that was just me

Fire_Fox

I've popped back to say to ignore my figures for metered water - had a phone call from Yorkshire Water earlier today and they reckon they have been underbilling me for two years!! :rolleyes:

Ladywhisper

Apologies if this has already been said, i just skimmed ^^

Make sure to put everything in a calender. Rent, bills etc & how much so you can see when big chunks come out in the month & u can put in any changes clearly. It makes it so much clearer than struggling figuring out what comes out you bank account when if you need to budget.

BadlyDrawnGirl_2

Hi guys! Sorry, I've been away for the last two weeks so haven't been able to check the replies on this thread. Lots of great advice, I really appreciate it.

In response to the Sky TV debate, I agree, we probably won't be watching all that much television - in our last flat, we didn't have a TV at all and we "somehow" survived. However, since we WILL need a broadband connection, and probably a landline as well, since both our families live outside the UK (much cheaper for them to call than a mobile number), I figured it might be worth the slight extra expense to throw in a TV connection. Not the case? Also, what's Freeview? It would be nice to be able to watch a few programmes now and then (the other half is a huge Top Gear fan, typically!) and although we know we can watch them for free on the BBC website, it DOES say you're supposed to be paying for a TV license if you watch them. Eek...

Another question: does anybody have any recommendations for mobile phone plans? Are there any that cater to couples? (For example, in the States the provider Verizon offers a "couples talk" plan that gives you a whole slew of free minutes to one other designated phone number, and since we mainly use our phones to communicate with each other while we're at work or commuting, this would be ideal.)