While many buyers have saved themselves a tidy sum in tax breaks by moving home during the past year, it seems that for some, this has created a false sense of security. New research by credit card company Tymit reveals that two thirds of homeowners failed to budget for things such as new furniture and decorating.
Property Wire reports on the findings of the survey, which found that the average overspend when moving in the UK was £14,861. It is estimated that the average budget for buying new furniture and white goods, and paying for redecoration or renovations of a new home, is £22,387.
However, the research found that the average UK house mover blew their budget by 67%, taking the actual spend to £37,248. Londoners proved to be the most prone to overspending, coming in at an overshoot of £27,000. They were followed by movers in the West Midlands, who spent £18,000 over their target.
This poor financial planning has far cancelled out the average £3,400 which was saved in stamp duty by home buyers. According to the article, the biggest budget busters include building service charges; plumbing bills; kitting out the bathroom; kitting out the garden; and redecorating.
There are other hidden ‘lifestyle’ expenses many first-time country dwellers often don’t account for, such as increased energy bills, the need for a second car, the acquisition of pets, and extra outdoor clothing. To help home buyers manage their budget better, The Financial Wellbeing Forum and Tymit offer the following tips.
1. Build a safety net into your budget
This involves drawing up a spreadsheet of all your incomings and outgoings, and then factoring in some wriggle room, should you unexpectedly have a salary cut, or have sudden increased outgoings. This will help to set a realistic mortgage target, which leaves you enough for the other moving expenses.
2. Keep an eye on the little things
It can be tempting not to sweat the small stuff when you are dealing with the biggest purchase of your life, but it all adds up. Keep detailed records of everything you will need and every penny you spend, even seemingly trivial items such as new wall art or a bathroom mirror, so you won’t sweep anything under the financial carpet.
3. Research the new area
It’s easy to overlook things such as signing up with a new dentist or gym, but these services may be a lot more expensive in different areas of the country, so it’s best to plan ahead. Are you further away from shops, schools, or workplaces, and will you be spending more on petrol or public transport?
4. Use a budget to resolve potential disagreements
If you are moving in with a partner, relative, or friend, you are bound to have different ideas at some point about furnishings and décor. Even if it is just you, you might find yourself in two minds about something. Rather than waste valuable time locked in disagreement or indecision, refer to your budget, and buy the item which most closely matches it in price.
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