Deciding to have a baby and buying a house are two of the biggest, not to mention the costliest, decisions we make in our lives. Combining the two can seem like a recipe for disaster. Still, no matter whether you’re a first-time buyer or a seasoned home buyer, you can expect to encounter various hurdles throughout your home-buying journey. It can be challenging enough to save enough money for a big enough deposit when the prices of houses continue to rise and the likelihood of getting approved for a mortgage looks ever bleak.
Add all those mixed emotions to the stress of having children, and it can cause extreme amounts of stress for prospective homebuyers. Many couples decide to juggle a property purchase alongside having a baby, as sometimes the latter decision can influence the other. Considering this, we’ve created this article aimed at new parents trying to save up for a house to make the experience as quick and smooth as possible.
Calculate Your Estimated Monthly Repayments
New and expecting parents can help themselves save for a house by calculating their estimated monthly repayments. Ensure that you make your calculations by the month to get the most accurate sum; from there, you can assess whether you’ll be able to afford the monthly repayments. On average, a person in the UK spends around 35% of their income on a mortgage.
Still, if you’re expecting or have recently welcomed a new baby into your life, then we recommend accounting for even less than that percentage. Alternatively, you could enlist the help of a financial advisor who will be able to calculate these sums on your behalf, taking into consideration the property you intend to buy, interest rates and what you can afford.
Add Together Your Baby’s Expected Costs
Another way that parents can help themselves save for a property purchase is by totalling up the expected costs of your baby. Whether you are expecting or not, you can know how much you can spare on house repayments while maintaining proper maintenance care for your child. Be sure to factor in all expenditures, no matter how small, from nappies to wet wipes, so that you get the most accurate calculations possible.
We also recommend that you factor in the costs of having your baby physically if you are currently expecting or nearing your due date, as it’s essential that you know how much money to leave untouched. The price can differ significantly depending on whether you’re going through the NHS or if you’ve got private health insurance and if any other complications arise.
Cut Back On Your Expenses
The best and most obvious way for parents to save money for a property purchase is by cutting back on their expenses as much as possible. We’re not saying that you must cut back dramatically, but the more you can afford, the better your savings will be. You could do this by endeavouring to eat at home instead of dining out, limiting the number of takeaways you buy, axing your gym membership until you move in, taking a break from TV subscriptions like Netflix, Disney+ and many more. You could also see if you could cut back on gas, electricity bills and food shopping by using comparison sites and seeing if you could get a cheaper rate from any other providers.
Reduce Your Debts
Most of the time, parents don’t realise the extent of their debt until they’re tasked with a house purchase. From student loan repayments to credit card bills, any unpaid debt can quickly mount up and cause difficulties for your property purchase, so it’s important to make attempts to reduce and eventually eliminate it. Depending on the extent of your debt, you can do this in various ways like withdrawing from your retirement fund, increasing your income, freezing your credit cards and many more.
If you cannot pay all your debts off immediately, strive to prioritise them and pay off the most important ones first. Suppose that you’re struggling with bad credit, you’ve been late with your mortgage repayments before or securing a mortgage with a debt management plan. In this case, you could consider enlisting the help of Money Nest, whose services can help match individuals with their ideal advisor. Peruse their site for more information, FAQ’s and blog posts aimed to assist people in achieving their property purchase in a smooth and time-efficient manner.
Review Your Joint Finances
Having a baby and purchasing a house are two life decisions that require shared responsibilities, including how you and your partner deal with household budgeting. Sit down together to access both of your financial situations, look realistically at what you can afford and set limitations. You may do this by mutually agreeing on a budget and promising not to go over or realistically talking about money with no sugar-coating. Also, consider any changes to your financial situation, like having time off work to care for the baby, and assess how this will impact your finances.
