My 50/40/10 budgeting rule helped me buy £210,000 first home

BUDGETING is essential when buying your first home but first-time buyer Lauren Smith used a simple rule to help her bag a £210,000 home.

Lauren, 33, who works as a digital communications manager for the NHS, dug deep into her spending habits to see what her outgoings were and how she could increase her savings at the beginning of 2020.

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After crunching the numbers, she created a 50/40/10 rule that saw her put 50% of her monthly wage packet into her savings, 40% towards bills and rent, and 10% for “fun” stuff.

She logged her spending in a mega spreadsheet, helping Lauren stay on track, and in May last year she got the keys to her £210,000 dream flat.

She also cut back on boozy brunches with pals, sold some of her clothes on DePop and quit the gym to help raise the £31,500 needed for the deposit for her house.

Lauren did get a helping hand buying her house from her family though – her dad gave her nearly £10,000 while she had £10,000 in inheritance as well.

She says she is lucky to be in a position where her family helped support her financially.

Her mortgage repayments are £666 a month – far less than the £820 she was paying previously renting a pad in London.

We sat down with Lauren to see how she bagged her flat and became a homeowner for The Sun’s My First Home series.

Tell me about your house

It’s a two-bed flat in a 1960s building in Kent.

It also has a bathroom and a big open plan lounge, kitchen and dining room space.

I use the spare bedroom as an office, and there’s a car park outside with my own space. 

There’s no outside garden area or a balcony, but there are some nice places to walk around nearby.

I love the flat because it has massive windows, which makes it really light and airy – and there’s a fireplace too.

How did you decide on location?

I have lived in Kent most of my life, so I know the area really well. 

It’s close to my family, and is close to London which is where I do most of my socialising. 

My uncle was walking past the property one day and noticed there was a for sale sign up – so he found it on Rightmove and sent it to me.

How much did you pay for it?

The house was on sale for £220,000, but I put in a lower offer of £210,000 which was accepted – and I put down a 15% deposit for it at £31,500.

I took out a £175,000 35-year mortgage at a fixed rate of two years. 

My monthly repayments are £666.

I did get financial help for the deposit – I know I’m really lucky and privileged to be in a position where I could get help.

I had inherited around £10,000, and my dad and my step-mum gave me nearly £10,000.

Initially I had planned to save up the deposit for myself, but when the Covid crisis hit, banks no longer were lending money to buyers with just 5% deposits – in most cases, it was 15%.

That’s when my family stepped in and agreed to cover the £10,000 needed

How did you save for it?

Before I seriously started saving for a house, I wasn’t particularly brilliant with money.

By January 2020, I had about £3,000 worth of debt – which is when I decided to move out of London and live with my sister and her boyfriend in Kent.

I paid a little bit of rent at £300 a month – much lower than the £820 I was paying in London.

To get my finances back on track, I made loads of spreadsheets, calculating every single penny I had spent for nine months to see what I had been spending my money on – and how I could cut my spending.

Crunching the numbers, I made myself a budgeting rule where I would put 50% of my monthly salary into my savings, 40% of it towards bills, and 10% of it was for “fun” stuff – so going to the cinema and seeing friends.

It was easier to keep on track with my savings during lockdown.

Because of traveling restrictions, I didn’t go on any holidays over 2020 – saving me around £1,000.

I also saved £200 a month on quitting the boozy days out in London, and dinner and drinks with my friends. 

Instead, I had a £10 budget a week for a takeaway.

I put myself on a new clothes ban for all of 2020, saving me around £300, and I stopped my gym membership, saving me £40 a month – which was £480 over the year.

Selling my unwanted clothes on DePop also helped me raise £200 to put towards the deposit.

How did you afford to furnish it?

I’m furnishing and decorating my home in stages. 

I needed to buy everything apart from a bed, so there was lots to save up for.

To save money, I bought a lot of my stuff second-hand – I’m the Queen of Facebook Marketplace!

My best bargains were a dressing table from Next, which was £30 instead of £300 it would have cost brand new, two Laura Ashley bedside tables for £40 which would have been hundreds of pounds, and an electric fireplace for a tenner – the same make costs £170 directly from the shop.

The old owner of the flat also left two armchairs which I sold for £250 on Facebook Marketplace. 

My friend also gave me a spare bed, which I’m going to pop into the spare room – I’ll spray paint it first to give it a makeover.

Any complications?

I was expecting to exchange and move into my home just a few months after my offer had been accepted on the flat.

But it took a whole seven months before I got the keys – even though there was no chain. 

The solicitors on both sides weren’t great – I didn’t hear a peep from them in the first two months of putting my offer in.

And when I finally pushed for an update, the seller’s solicitors hadn’t even started the paperwork – and only got round to it in February 2021, a whole four months after we had agreed a deal for the flat.

Both me and the sellers of the flat weren’t given a reason for the delays – and with the Covid lockdown at the beginning of 2021, the setbacks only continued.

Advice for other first time buyers?

If you are a solo first time buyer, rely on your friends and family for support.

It’s a stressful and worrying time going through the buying process, so definitely ask for help where you can.

I printed out pictures of the flat I wanted around my workspace so I could stay motivated on my goal.

Planning how I would furnish my place and organising my moving in party also kept me going.

Lauren isn’t the only one who used a budgeting rule to buy her first home – Theresa used the 50/30/20 rule to bag hers.

One couple nearly got gazumped on their own home – but ended up knocking £13k off the price tag instead.

Being on furlough didn’t stop these two first time buyers bagging their first home – here’s how they did it.

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This post first appeared on thesun.co.uk