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Life brings along challenges, many of which are financial. There are in fact a few financial decisions and commitments that really stand out from the crowd during our lifetime. Careful consideration needs to be taken before signing on the dotted line.
First house purchase
Buying your first house is probably the largest financial commitment you will make during your lifetime. It is important to get expert advice on the financial products you commit to, as you are likely to be paying off your loan or mortgage for the next 25 years or so.
Before you get accepted for a mortgage you will need to have saved up a large deposit. This takes time and careful budgeting is required.
Any debt that you have accrued will be taken into account when getting a mortgage. Debt includes credit cards, student loans, store cards and overdrafts. The amount of debt you have will lower the amount of money you can borrow for your house purchase. If you find that you have small amounts of debt in different places you could consider applying for a consolidation creditcard in order to make your payments easier to manage.
Ensure that you can easily meet the repayments on your mortgage and also take into account possible fluctuations in interest rates.
In the UK the average cost of a wedding now amounts to around £30,000! Weddings are hugely expensive, if you don’t reign in your spending a little. Starting married life in debt is not a good position to be in, however you don’t want to feel short changed by scrimping on your spending.
If you have your heart set on a huge wedding with no expenses spared, start to save early, possibly years in advance. In fact most venues require you to book years in advance anyway, so you will have time to stick to a tight budget in order to save up.
If you would like to save money on your wedding draw up lists of what a wedding entails and discuss with your spouse what is important to you both. You will be able to reduce some of the costs by not having expensive chair covers or hiring suits instead of buying them.
Any money saved could be spent on a more expensive honeymoon, if you both wish.
Starting a family is incredibly expensive due to the amount of equipment and paraphernalia a child needs in the early years, right up to when they head off to university, or learn to drive!
It is estimated that the cost of raising a new baby costs around £11,000 in its first year alone! It is therefore a good idea to prepare financially for starting a family and remember that your joint income is likely to be reduced when maternity leave is taken. Childcare costs can be huge and may actually take up the majority of one salary.
It is however possible to make savings on the purchases a new baby requires, being savvy in where you shop, looking out for sales and buying second hand are all good options. A new baby will not mind if they are not being transported around in the latest design in travel systems, they just need to be comfortable, fed and loved!