Have I budgeted correctly for my dream home?

GDB2222

Only £60 per month for food? How is that possible? OTOH, you may make some savings on the water/gas/electricity.

You do realise that this tiny new-build flat is going to lose a lot of its value as soon as you move in and it stops being new?

GDB2222

Nothing in your budget for service charges.

tristinh

I think the food is a little tight, but can be done if you are ruthless.

What about changes in interest rates? Could you afford it at say 8%?

A question for others.... do you really budget for job loss?
I suggested this to hubby as one of the cons of buying our 'forever house' now, rather than just a slightly bigger one (i.e. much more expensive and pushing us that bit further). His view was that we couldn't live like that and we would deal with it if it happened. I have to say, I would have never bought if I was thinking like that the whole time? Maybe we are being irresponsible? BUT we do have £900 a month spare after all our expenses and luxuries are covered, this wouldn't cover the shortfall of either of our wages though!

ukcarper

I see it’s a flat is there ground rent or maintenance charge.

GDB2222

tristinh wrote: »

I think the food is a little tight, but can be done if you are ruthless.

£13.80 per week for food? Are you girls all size zero wannabees?

LittleMissAspie

Sorry but I think your income is too low for this to be a sensible idea.

My thoughts on your figures:
Gas and elec are more likely to be £40 for the lot
Water is more likely to be £20 max
Groceries are more likely to be £80-100
Car insurance, you will pay extra for going direct debit, better to pay it all up front so need to save throughout the year for that
Eye test, if you work on computers you should be able to get that for free
Life assurance, as a single person with no dependents you don't need this
Presents, £5 a month seems extremely low, I save £20 a month for presents though I do spend upwards of £50 on my boyfriend
Entertainment, £30 is very low, I give myself £50 a month pocket money and I always run out by the end of the month. All I buy with this is lunch at work 1-2 times per week and drinks/sandwiches sometimes when out with boyfriend.

You will need an emergency fund in addition to your buildings insurance, £3000 should cover most disasters.

Have you accounted for mortgage rates increasing? You should be able to comfortably pay your mortgage at 7%. Mortgage rates are insanely low at the moment and can only go up.

A flat is highly unlikely to be a normal freehold, you will have service charges to pay.

A question for others.... do you really budget for job loss?

I did! I have multiple contingency plans for loss of income in fact. Firstly when we were buying our house I made sure that our essential outgoings would be less than my wages (as I am the lower earner) so that we would be safe if my boyfriend lost his job. Second line defence is that I have 9x monthly income in my savings, boyfriend has 4x monthly income in his savings, all conveniently offsetting against our mortgage. Third line defence is our £3k joint emergency fund. Fourth line defence is our DIY budget, fifth line defence is our credit card limits and sixth line defence is our parents! Perhaps I have gone overboard(!) but it's nice to feel completely financially secure.

19lottie82

i'm guessing by your net income, you're on about 15k?

I think you'll be struggling tbh.

You mention £40 per month for food? What about other household items like cleaning products, toilet roll etc? Personally I'd be looking at more like £100 pcm, unless you want to live on beans and toast 24/7.

You haven't even included any contingency funds, or service charges?

The one thing that sticks out for me is the 13k car which is costing you almost £250 a month, before you've even insured it, taxed it or put petrol in it.
. My advice would be ditch it and get something a lot cheaper to purchase and run. You could easily half that amount.

On your wage, you can't afford to have a nice car and live by yourself in a nice flat, it aint going to happen. If you are determined to keep both, then get a second job, as others have suggested.

PasturesNew

theartfullodger wrote: »

You've left benefits of Working Tax Credit £171.22 off your calculations...

OP doesn't qualify for WTC due to age... and probably income is too high as well.

lizzywig

I just wanted to add to everyone's comments that no one is trying to be pesimistic about it but without patronising you we've been there and it's such a big responsibility. You have to make sure you have plenty left over each month or else you have no contingency for the worst. My advise would be to run the SOA past your parents and see what they think. Perhaps update it with peoples comments first. They will know whether you are being realistic or not.

sirmosh

You're not covering one off things you'll need to save for throughout the year and will go WAY over that £60 'spare'. Dentist, MOT, car tax, clothing budget, maintenance, car repairs, household goods beyond food such as cleaning products and loo roll. There are loads more things which even if you think hard about you still won't expect. Unless you have a huge amount savings you'll live a miserable life of getting by and not being able to afford to do anything other than work or sleep.

Even if you did manage to put £60 by each month it wouldn't even cover a lot of car or house repairs.