Be planned and have a budget
There aren't many people in the world who LOVE to budget and stick to it but those who do generally find themselves in a good spot to get to where they want to go financially (whatever that means to you).
Since the dec 1, 2021 CCCFA changes, were seeing the need for people to be planned and have a good budget in place to make sure we can help them step forward in the best light to get home loan lending in place.
Planning
The banks are needing to confirm your income and expenses for at least the 3 months before you look to get lending in place and so having a plan is really important. We can help you put that plan in place by discussing things like:
- How much lending you want to get?
- What income you will need to service that?
- What deposit you might need depending on your situation?
- What expenses you could potentially look to cut to get the lending you want?
- What other types of income you could look at?
Budgeting
Budgeting isn't always the most fun you'll ever have but it can be one of the most rewarding when you stick to get and get the result at the end.
The things that we find that can throw peoples budgets out and really limit what they can borrow for property lending are:
- Debt repayments - Car loans, personal loans, student loans
- Subscription services - My Food Bag, Netflix, Disney+, Gaming subscriptions, Gym memberships
- Food & Alcohol - Eating out, purchased lunches, bottle stores and bars
- Insurances - Life, heath, contents, vehicle
Sometimes it doesn't feel like much until it is added together for a month and then it can equate to hundreds and sometimes thousands of dollars that can't be considered as income to be used for repaying a mortgage.
A good exercise is to take a normal month of spending and categorise it so that you know what you are actually spending on each category. A good category list to start with is:
- Utilities
- Food/drink
- Entertainment
- Vehicles
- Home
- Insurances
- Short term debt
- Other
- Savings/Investment
This can then identify things that are over and above where you think and then you can set a budget to stick to.
Bugeting Tools
We have two tools we generally suggest for budgeting. One is simple and manual and one is more techy automated.
Budgeting spreadsheet
Here is a spreadsheet we've developed that has a weekly, fortnightly or monthly budget you can put numbers into and then it gives you a cool graph at the end.
Pocketsmith
Pocketsmith is a great New Zealand based budgeting system and has automatic bank feeds from pretty much all the major New Zealand based banks. It has a good app to help you categorise your expenses so that you can see a break down of everything you spend.
This gives accountability and an overview of things so you can adjust your spending accordingly.
Want support in planning & bugdeting?
If you would like us to have a look at where things are at for you now and help make a plan for you to buy in the near future, drop us a line and we can go through things together. We're happy to look at your budget and see where things can be adjusted so that you can get to where you want to go.
Financial success is all about choices. We can help support you to get you where you want to go in the property market.