Have I budgeted correctly for my dream home?

myteeduck

Hi,

Hoping someone can help me… I am desperate to move out on my own and gain some independence. My parents have very kindly (as they are about to come in to some money) agreed to help me to finance a property – we will sell one day and they will have their retirement fund and I will have had experience in living alone. We have found a new build property which is in my dream area and we are just trying to work out if I can actually afford to pay the mortgage as otherwise we wont go any further if I cant.
We have worked out the following estimates but I was hoping if somebody could help decide if my estimates are accurate.

It will be me (single female living alone) in a one bed apartment (on top of mine and my next door neighbours garage) and there will be a 3 bedroom house on either side of the 2 apartments, which the two apartments will be built between – like a coach style property. My neighbour would be the one with the drive underneath so hopefully I won’t have issues with heat going out the floor below and I won’t have to deal with what my mum calls a “flying freehold”.

I have estimated per month the following amounts.

£380 on the mortgage and buildings insurances.
£30 on Water
£60 on gas and electricity.
£5 on broadband
£18 on line rental (will be used for calls in only and broadband)
£22 on mobile (in contract already)
£80 on council tax (with single person discount)
£60 on petrol
£60 on food
£60 spare to use for car maintenance, xmas, birthdays, socialising and anything else.

TV licence is to be paid in full and next years to come out of the £60 spare.

I’m not going to move until March so I will be changing my ways now to try to have enough money to take with me to help furnish the flat, pay for the telephone connection and get the first year TV licence.

I’m not a big spender when it comes to socialising - £10 is enough for a good night out at the bingo or for drinks with friends and we go out maybe 3 times a month. Most other times we get a cheap bottle of wine or drink tea and have a girly night in.

Thank you in advance for any help and advice.

Are my amounts accurate for my circumstances?
Does anyone have any tips so I can try to save more money?

Myteeduck

spadoosh

Theres not really alot of expenses there. And im presuming income is around the £775 mark as you say, the £60 is spare?! I would suggest doing a S.O.A and itemise all the expenses you can think of. The £60 spare doesnt seem like a lot to cover things you havent mentioned like car insurance, tax, household goods.

lizzywig

Looks like you've covered pretty much everything to me, just a couple of questions. Will you want mortgage protection of any kind, in case you're made redundant or off long term sick? Will you have Sky TV or will you just have freeview?

I would also personally put more than £60 a month aside for car maintenance, xmas, birthdays and socialising. Our car costs £160 a month to run (that's inc petrol, tax, mot, service and repairs) and covers us for anything that might crop up. We put approx £35 a month aside for xmas, this varies from person to person so think about how much you would want to spend at xmas and divide by 12. How much do you spend on bdays and how many people do you buy for, work out your total amount and divide by 12.

You say you spend £30 a month on socialising which will leave £30 a month to cover all of the above.

I would also be inclined to budget for £100 a month on food for the first couple of months to see how you get on having never lived alone before.

PasturesNew

You could do it, but with the weight of responsibility on your shoulders and the feeling it's "yours" so you need to improve it by buying stuff ..... could prove to be your undoing.

My advice would be to get a second job.... somewhere sociable. A food place would be good, restaurant not takeaway.

Why?

1] Extra income "just in case"
2] Gets you out of the house, so you're not sitting there dreaming what you can put in the corner, or flicking through looking at cushions online
3] Restaurant gives you the option of getting tips
4] Highly likely to be fed something, meaning you lessen your own food bill.

Even if you just try to do this for 1-2 years until you're established. You could simply put any wages into a separate account as your emergency fund, so you can see if you can live on your income or not ... and if not you've already got the 2nd job you need and the income saved for any emergency (e.g. suddenly spotting the perfect rug that'll match the cushions you bought).

myteeduck

Statement of Affairs and Personal Balance Sheet
Household Information
Number of adults in household........... 1
Number of children in household......... 0
Number of cars owned.................... 1
Monthly Income Details
Monthly income after tax................ 1046.67
Partners monthly income after tax....... 0
Benefits................................ 0
Other income............................ 0
Total monthly income.................... 1046.67
Monthly Expense Details[/b]
Mortgage................................ 380
Secured/HP loan repayments.............. 236.39
Rent.................................... 0
Management charge (leasehold property).. 0
Council tax............................. 80 (After single person discount - estimated for new tax year)
Electricity............................. 30
Gas..................................... 30
Oil..................................... 0
Water rates............................. 30
Telephone (land line)................... 13
Mobile phone............................ 22 (on contract until July)
TV Licence.............................. 12.12 ( to put aside for year 2)
Satellite/Cable TV...................... 10 (Lovefilm to stop me getting cable - may drop)
Internet Services....................... 5
Groceries etc. ......................... 40 ( will eat at mums 2 times per week)
Clothing................................ 5 (do not need any clothes, its all i've bought for weeks)
Petrol/diesel........................... 50 (hope to fill up either 1 big one or 2 smaller times per month)
Road tax................................ 10 (120 due in april which will have- this is to save for year after)
Car Insurance........................... 0 (just re-newed and paid in full - will go direct dbeit next year when know what i'm spending)
Car maintenance (including MOT)......... 0 (car is new - dont need mot for 2 years - services are included in cost of car and has warrenty until summer next year)
Car parking............................. 0
Other travel............................ 0
Childcare/nursery....................... 0
Other child related expenses............ 0
Medical (prescriptions, dentist etc).... 5 (1 eye test, 1 dentist per year)
Pet insurance/vet bills................. 0
Buildings insurance..................... 0 in mortgage
Contents insurance...................... 0 in mortgage
Life assurance ......................... 0 in mortgage
Other insurance......................... 0
Presents (birthday, christmas etc)...... 5 (£45 for xmas, £45 for birthdays)
Haircuts................................ 5 - 4 cuts per year at hairdressers - neighbour to do touch ups)
Entertainment........................... 30 - will cut down on if needed - have more nights in or opt to do cheaper things
Holiday................................. 0
Emergency fund.......................... 0
Total monthly expenses.................. 998.52

Assets
Cash.................................... 0
House value (Gross)..................... 0
Shares and bonds........................ 0
Car(s).................................. 13000
Other assets............................ 0
Total Assets............................ 13000

Secured & HP Debts
Description....................Debt......Monthly...APR
Mortgage...................... 0........(380)......0
Hire Purchase (HP) debt ...... 0........(236.4)....0
Total secured & HP debts...... 0.........-.........-
Unsecured Debts
Description....................Debt......Monthly...APR
Total unsecured debts..........0.........0.........-

Monthly Budget Summary
Total monthly income.................... 1,046.67
Expenses (including HP & secured debts). 998.52
Available for debt repayments........... 48.15
Monthly UNsecured debt repayments....... 0
Amount left after debt repayments....... 48.15
Personal Balance Sheet Summary
Total assets (things you own)........... 13,000
Total HP & Secured debt................. -0
Total Unsecured debt.................... -0
Net Assets.............................. 13,000
Created using the SOA calculator at www.makesenseofcards.com.
Reproduced on Moneysavingexpert with permission, using IE browser.

I have made some notes, if anyone can make suggestions?

Mikazaru

£40 for food is incredibly low, even if eating at your parents a couple of times a week! Will the surplus be going into an emergency fund? What if you needed work done at the dentist, or something repaired at the house? £30 for water seems slightly expensive, I paid ~£18 but was on a meter.

cte1111

Buildings insurance..................... 0 in mortgage
Contents insurance...................... 0 in mortgage
Life assurance ......................... 0 in mortgage

Are you sure about these? I think it is unusual to have building and contents insurance 'included' with your mortgage. I would do a quick look on confused.com to estimate how much your buildings and contents would be at your prospective new address.

I also don't think it is possible to live off £40 a month for food, need to increase this to £80 at least.

TBH I think on your current income, you have to choose between a lovely new car or a lovely flat of your own. If you did not have the car loan, then you could probably just about manage on your income. However the loan repayments do not allow you enough money to live off.

spadoosh

I think its pretty damn tight. I would only look at doing this if your very good at keeping to budgets! There are always things that crop up and things like your car insurance, fair enough its paid this year but can you afford to be paying out £50 a month extra next year?! Is your income likely to change at all over the next 2-5 years (up or down). I assume the loan repayments is for the car and is quite a big chunk of your income, is there long left on this, guessing a few years?! If this debt was gone i think you would be comfortable.

There doesnt appear to be much contigingency and its very easy to let costs get on top of you.

Sorry, im not trying to put you off or say your budgets are wrong but i just think itll be very tight.aid if your good with budgeting and are strict with expenses you could be able to manage it but a one off expense could seriously put a spanner in the works!

Garudi

I'm in a similar position to you... I budgeted £200 per month for food for 1 person. I do eat a lot... However I also cook from scratch a lot too. I very much doubt you could feed yourself for £15 a week.

theartfullodger

You don't appear (just like almost everyone..) to have budgeted for 3 key things...

- Unexpected repair - £10k
- Family/personal crisis - £10k.
- Loss of job - arrrgggghhhhhhhhhhhhhhhhhhhhhhhhhhh

The local courts have people in most weeks having their pride-and-joy homes being repossessed because they didn't budget for one of these either...

Maybe go down there one week & sit in: It's a sobering experience!


also..

My parents have very kindly (as they are about to come in to some money) agreed to help me to finance a property – we will sell one day and they will have their retirement fund an

So will it be their property in their name with you as tenant (otherwise how come they will have a retirement fund..) or joint names ???





Cheers!

Garudi

With regards to losing your job, you need to budget for either overpaying your mortgage by a substantial amount, in order to take a mortgage 'holiday' for a good amount of time, or getting mortgage payment insurance.

The advantage to overpaying, of course, is you will pay it off quicker and pay less interest.