Is it getting harder to make your mortgage repayments now that your family is growing? Sure, it’s worth it – after all, you bought your home with the vision of bringing up your family there – but that doesn’t mean that it isn’t a struggle sometimes.
Here are some ideas that might help you manage this balancing act.
Balance through budgeting
A well-planned budget is your biggest asset when it comes to achieving the goal of meeting your family’s needs while keeping up with your repayments. This means investing time and energy in making, maintaining and sticking to a realistic budget. Dedicate some time to sitting down and writing out all your income and expenses. The best place to start is with your monthly income and your monthly expenses, then break it down into items like your expenses of groceries, transport costs, internet/phone plans and utilities bills.
Tip: It can be helpful to use a budgeting app or a spreadsheet to get an understanding of what you’re spending money on day-to-day. Spending can easily get away from you – sometimes you feel like you’re monitoring your spending, but then you start tracking everything and realise you were taking more liberties than you thought. We all do this, so don’t beat yourself up about it!
Ask yourself things like: how will my expenses change as my kids grow up? Are there any expenses I can cut down? What can’t I compromise on?
You can’t stick to a budget that isn’t realistic for meeting you and your family’s needs, so it’s important to be honest when you’re planning your budget. If you make a budget that isn’t working, that’s ok! You can always go back and revise based it on what you’ve learnt. Find out why you overspent, and factor that into your new budget.
Tip: Get the best rates on your electricity and gas bills by switching providers every year or so. Many companies offer discounts for your first year, so switching when these expire keeps your prices down. Use an online comparison tool to find the best deal.
Don’t forget about refinancing
Refinancing is always an option. This means transferring your home loan to a different lender to get a better deal on terms and interest rates. Regularly keep an eye on your home loan and other offers around to make sure it’s still the right one for your needs. Your situation might have changed since you signed up for your current mortgage, like your credit score wasn’t as good as it is now, so you might have better options and interest rates to select from.
Tip: Don’t forget to read the fine print! Make sure you factor extra costs into your decision, like exit fees charged by your current lender and application fees charged by your new lender.
Putting the time into thinking about how to manage your finances better will help you to balance your home loan with your growing family so you don’t have to miss out on anything that you’ve worked so hard to achieve for your family!