If you're planning to buy a new home, spring is a great time to freshen your finances, says Carl Coetzee, chief executive BetterBond.
Although the banks are actively trying to lend to buyers, they still require people with clean credit records and sufficient disposable income to afford the loan repayments. He advises aspirant buyers to:
◆Dust off your budget: You need to know exactly where your money is going every month, where you can save and how long it will take to pay off your debts.
◆Shoo away budget “vampires”: Review all the subscriptions and services you pay for every month via debit order that could be draining money from your budget without your noticing.
◆Brush up on rewards programmes: If there’s a monthly charge to belong to a rewards programme that is higher than you can earn from the programme, ditch it. And don’t fall into the trap of spending more just to earn points.
◆Toss out bad spending habits: Change your routines to avoid a substantial discretionary spending – like the cost of drinks with friends every Friday night, or lunch out with the family every Sunday, or shopping for new clothes once a month.
◆Steam-clean your credit record. Even if you think your finances are in good shape, this is a good time to check your report and make sure there are no nasty surprises, like old accounts you forgot to close or someone else taking out credit in your name.
◆Scrub away your debts: If you want to be debt-free, it’s important to be realistic and then to make a proper plan to pay everything off – and avoid too much credit in the future. Buyers should also look for ways to earn extra cash, Coetzee says