Financial Advice For Moving Out
So you've decided you want to spread your wings and have your own place but are unsure on where to start or what to do?
First off you need to decide whether you would like to rent or buy your own house, you would need have a look at your finances and talk to your bank to see if you can get a mortgage with your current earnings. If approved, you would need to save up for to put down a deposit, this can vary between banks depending on your situation, however usually the deposit is 10% of the house you are looking to buy, therefore If you are wanting to get a mortgage for a house for £150,000 you would need to have saved up £15,000 for a deposit. You can save up after the bank has told you how much you would need to put down if you haven't decided whether to rent or buy yet and want to look at your options.
If you would rather rent a house or flat or are struggling to get a mortgage then there are a few things to consider you would need a deposit of the amount the landlord has said he/she wants, this should usually be at least one to two months rent on top so you are covered for the first month or two, however make sure to include rent charges into your budget so that you don't over spend or end up in contracts that you can't get out of.
There are many things you need to consider when moving out, including:
- How many rooms you will need
- Can you afford both the rent/ mortgage and the bills? (also look into any help you might be able to get from the council but make sure you have exact amounts if you can get help as you may find you get more or less than what is said on any online calculators and this can cause financial stress and/ or debt later on)
- Do NOT buy any contracts until you are certain you can afford them, this includes Sky and other TV packages or broadband, weekly/ monthly payments for furniture i.e Littlewoods or Brighthouse etc.
- If you are in need of furniture, the best thing to do is to get them second hand and save up for new furniture.
- Budgeting is a complete must. You might find that your wages are different each month so make sure to do a plan every time you get paid, there are applications that can help you with this if you struggle. Make sure to include rent, groceries, gas, electric and contracts you have into this budgeting plan, also leave more money for groceries than you'd think you might need so you have enough to get more later on if needed. Also be sure to include money for spends and money you may want to put to one side to save up for certain things like: holiday, car, new furniture/ clothes etc.
- Keep checking your bank to keep an eye on your spends and making sure you always have enough to cover your bills.
- Never get a pay day loan. If you need temporary financial help, ask a family member or close friend, sell something you don't need, or use a money trading place for buy back offers on something you can live without temporarily. Pay day loans along with interest can make you need to take one out every month and charge extortionate prices for temporary lending, this can lead you into debt or struggling every month.
- Do not get a bank loan, overdraft or credit card unless you are sure you can pay it back. A lot of people find they end up going too far into these and can't get back out of it again due to interest payments. If you find this is the only option, make sure to get a low amount for borrowing and don't extend it unless you can definitely get back out of it again.
- Always consider low months where you may not earn as much as you normally would and make sure to save money up to cover these times just in case you find yourself in them. Time off work for instance can put a strain on your finances and although they can't be helped, they will affect your finances if your bills are only just covered by your wage.