As we enter another new year, it is now as time as ever to reassess our spending habits and put our finances in order.
For first-time buyers looking to take that first step on the real estate ladder, or current homeowners looking to move up the next level, Brian Murphy, Head of Lending at Mortgage Advice Bureaux, shares his top tips for budgeting for 2022.
1. Cut costs where you can
There is no doubt that cost cutting is essential, but it also needs to be feasible. It’s a good idea to understand the income you’ve earned in comparison to your expenses, so you can prioritize what you do or don’t need. For example, what subscriptions or memberships do you have that you don’t use? Are there any home bills you can get better deals on? Any remaining cash you have can then go to a savings account to put into that all-important deposit.
2. Create a budget
Organizing your money is key to starting your savings journey. Using a budget calculator can help you keep a track of your income and expenses, whether it’s rent, mortgage or other expenses, while maintaining your goal of making any savings you want to make.
3. Save less and more often
Saving doesn’t have to be hard, nor should it leave you struggling financially. Instead of setting aside unrealistically large amounts of money that will leave you struggling for the rest of the month, saving small amounts here and there can make all the difference to your long-term savings goals. It can be as simple as buying cheaper alternatives to your favorite snacks at the supermarket.
Some banks also offer a ‘Provide Presentation Reporting’ option meaning if, say, you spend £1.80 on an item, the account will ’round up’ the transaction and put the 20p into a separate receptacle. This way you can save a little and often without even realizing it. You’ll be amazed at how quickly your savings pot grows
4. Consider your priorities
When it comes to your money, planning is crucial. Depending on how quickly you want to reach your end goal, you can choose to cut out all the luxuries like vacations and meals, and put every extra penny into your savings goal. Someone else may want to keep their luxury but decide not to buy a new car.
The key is to get the right balance for you. The best thing you can do is sit back, budget and plan what you want to achieve and spend your money on.
5. Shop for the best deal
A mortgage is one of the biggest financial commitments anyone can make. Whether you’re a new buyer or looking to refinance, be sure to shop for the best deals that work for you and don’t get caught up in prime rates. Talking with a mortgage advisor will help you understand what is best for you.
* Brian Murphy is the Head of Lending at Mortgage Advisory