Most people don’t realise just how much they spend.

It’s really easy to blow a couple of hundred dollars on a night out.

Couple of hundred dollars on cigarettes and alcohol per week (if not more)

Spend money on Lotto, the TAB and footy on line gambling.

Even a couple of coffees a day and a breakfast out could be one hundred dollars a week.

Or if lash out on an expensive new car that can really take all your money.

People who do all of this would probably spend enough over 10 years to buy a small house in a country town outright.

It has been estimated the lifestyles of the rich and famous that you might see in the media, jet setting, eating out, expensive cars, homes and holidays would cost about $35 million dollars a year. Easy to spend … you bet.

We all enjoy some of these things, so it’s not about never doing these things but allocating an amount of money we can actually afford to spend on them and still stay within our budget.

A budget is just a plan to get to where you want to go.

Many peoples plan is to buy a family home.  Some peoples plan is to travel, others to support family overseas.

On an average income, you can’t do it all at once.  People come to us thinking that they would like to buy a home. But they are not in a position to save for a deposit or pay a home loan because they have run up so much debt.

They will have to clear cars loans, personal loans, and credit cards before they can even look like saving for a deposit. That may put them 10 years behind in being able to buy a home.

If you are serious about wanting to own your own home you need to have a Budget.

If you think you can afford a home loan try this.

Just say you wanted to buy a house or unit worth $700,000. You are going to need a Deposit and legal fees of say $70,000. The loan repayments, water rates, and home maintenance are going to be around $850 a week. (2017 rates)

Say you are paying $450 a week rent, that means you are going to have to live on $400 a week less than you are now. So let’s do your budget so that you put that extra $400 a week into savings. If you cannot live on the balance of your pay for 3 or 4 years, you cannot afford to make the payments on a home loan. But! If you can, you will have your deposit together in under 4 years.

This is the exact thing that a bank will look at when assessing your eligibility for a Home loan. Have you demonstrated the ability to do this? They call this sort of savings, genuine savings.

If a couple has a good credit rating, no other Debt they would only need a combined income of around one Hundred Thousand dollars to do this relatively comfortably.

When you do your budget in Money Buckets, Add your Rent, Surplus and other loan payments together to see what you might actually have available to make a home loan payment, if you clear Debt.

We deliberately break your budget into weekly spending money and Regular bill money so that you can get an idea of what you can actually spend on a weekly basis. How tight you keep that is up to you.

If you start out too tight and find it’s not liveable you can always go back in and adjust it.

But if you are using real numbers and there is not enough money, something must change in what you are doing or the Debts and Interest will just keep going till everything eventually falls over.