In the United Kingdom, more and more people are choosing to rent than to buy a house. The latest available data shows that house ownership in the UK has fallen 9.9 percentage points in almost ten years, from 73.3% in 2007 to 63.4% in 2016. More and more people are deciding to rent.
If you’re one of them, you’ll most likely move at least twice before buying your first property. Sadly, the cost of moving house is not cheap. Depending on how much stuff you own, you’re looking at anywhere between £450 to £600. The good news is there are some things you can do to save money in preparation for the move. Here are five budgeting tips to save for moving house:
1. Open a savings account.
If you already have a savings account, great! You can skip this tip. If not, then you should definitely consider opening one to save for moving house and to keep all your money in one secure place. It will be a lot easier to track your payments, spending, and savings too, so you wouldn’t have to worry about going over budget during the move.
2. Pay yourself first.
Some people make the mistake of only saving what’s left of their income after paying all of their expenses. In your budget, you need to make saving a priority. Before distributing your budget into the four expense categories, you should deduct your savings first. Setting aside 20% of your income for your long-term savings is recommended. You need to set aside more if you’re saving for other things like travelling or moving house.
3. Create a budget and stick to it.
To create a budget that helps you to save money effectively, prioritise your spending by dividing it into four categories:
- Level 1 expenses are both urgent and important (food, transportation, groceries)
- Level 2 expenses are urgent but not important (night outs, shopping, Starbucks coffee)
- Level 3 expenses are important but not urgent (rent, utilities and bills, debt payments)
- Level 4 expenses are neither urgent nor important (subscriptions to Netflix, Spotify, etcetera)
As much as possible, limit your spending to Level 1 and Level 3 expenses until you’re settled in your new home. For example, you can avoid eating out on the month leading up to the move. Don’t pack your kitchenware just yet so you can prepare meals at home. You can also cut back on night outs, avoid shopping, and take public transportation instead of driving until the move.
4. Plan ahead.
How much time do you have left before you move house? If you’re expecting to spend £450 on the move and you have three months left to save, then you need to save £150 a month. Look into your budget and find room for this amount.
5. Avoid unnecessary moving costs.
You don’t need to make your new home perfect as soon as you move. So don’t sweat about the decorations and other similar items just yet. You’ll make room in your budget for these things after you’ve paid for and finalised moving house.
Able to save in no time.