So, you've just received your first pay slip and are eager to spend some of your hard-earned money. Stop! Before you do, unless you are lucky enough to still be living at home with your parents and have no financial responsibilities there most likely will be other things to pay for before you can go on that shopping spree. So, what other financial responsibilities might you have and what exactly do the names mean? It’s time to start managing your money and budgeting. It may help to use a budget planner sheet or app to help you keep track of things.
First of all, if you're not still living with your parents or carers, you will either be paying for rent or a mortgage, though you may find that you’re still sked to pay rent while living at home to help out with the family budget.
So, you've just received your first pay slip and are eager to spend some of your hard-earned money. Stop! Before you do, unless you are lucky enough to still be living at home with your parents and have no financial responsibilities there most likely will be other things to pay for before you can go on that shopping spree. So, what other financial responsibilities might you have and what exactly do the names mean? It’s time to start managing your money and budgeting. It may help to use a budget planner sheet or app to help you keep track of things.
First of all, if you're not still living with your parents or carers, you will either be paying for rent or a mortgage, though you may find that you’re still asked to pay rent while living at home to help out with the family budget.
This is a type of loan used to buy a home, plot of land or other type of real estate. You can apply for a mortgage from a bank or a building society. In most cases you will need to have a sum of money, usually a percentage of the overall amount, for a deposit. In the UK the average deposit needed for first time buyers in 2023 was 15%. of the property purchase price. The average length of a mortgage is 25 years. You can pay them off early, though the bank or building society may charge you to do so. They will also charge you interest on the money that you have borrowed from them.
You've got the roof over your head sorted but your living costs don't stop there. There are some things that you can't avoid paying for. You will need to have heat, light and water. There are a range of different ways that you can bring the energy needed for heat, light and cooking into our home, but they will still need to be paid for whether it's logs for your wood burning stove or gas to power your cooker. If you are using gas and/or electricity there are different tariffs that your supplier might offer you. You could choose a fixed price tariff where you pay a price fixed by the energy company for the fuel that you use over a specific length of time, this could be 12 months or more. The one advantage with this is that should the price of gas the company has to pay for it go up above your fixed price the price you have to pay stays the same. Equally, though, should the price go down a lot then you wouldn't benefit from it.
You also need to have water piped into your home for many uses, including washing up, drinking, cleaning clothes and flushing your toilet. Did you know though, that your water supplier charges you to take wastewater away as well as supplying you with clean, fresh water?
Unfortunately, this isn’t the end of the expenses that come with living independently. These aren’t the last of the payments that will be deducted from your hard-earned wages. The main ones are Council Tax and insurance which we will look at in later posts.
The other things you need to consider when preparing to live independently. You need to decide whether you actually need the latest phone, subscription to Netflix or fastest broadband available, or more likely, can you afford them.
