Everyone needs to save money for buying property. But in order to save for your new home, or to borrow for that home, you will need to budget for it. And this budget only gets harder as your family grows.
The following are four basic budget tips that will help you keep more money in your pocket and get a handle on your household finances
- First of all, list your monthly income, including everything that earns you money. List all of the costs you have to pay each month, including rent, power, gas, car repayments, school uniforms, food etc. In short, anything that is a necessity in your and your family’s life.
- List all of the costs you can avoid from the previous list. This includes all things that are not necessary in your life, including entertainment, take away food, fancy new clothes, travel etc. This represents your “expendable income”: money that doesn’t always need to be spent. It is very important that you and your family are honest about what you don’t really need, if you are serious about saving.
- Now that you have defined what you have to pay and what you like to pay each month, you can control your budget for the next month by reducing your expendable income spending.
- Subtract your necessary costs from your total income to see what remains for the next month’s budget. This figure is the amount of money you can potentially save each month if you control your spending habits. Completing this exercise should help you review your spending patterns and make better financial decisions. The better your budget, the more control you can have over your monthly savings.
Ultimately, if you follow these tips, you will be surprised what money you can save to put toward a new home, or to manage home loan repayments.