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When you are ‘young free and single’ income tends to go on fun things like holidays, films or eating out. But later, when it comes to buying a property, possibly for the first time in your life, you have to start managing your finances. And if children come along those plans become a bigger challenge.


Budgeting for everyday essentials such as food, fuel and a roof over your head is relatively easy to plan. More challenging however, is to build up a ‘buffer’ to cope with the unexpected – perhaps the need to replace your car or to survive a period of redundancy.

Whilst putting aside some money for future plans is not an exciting activity, savings give you flexibility to do things when you want to, without impacting on your daily existence or running into debt.

Budgeting is dull but is also commonsense. It is never too early to create a credit and debit spreadsheet, where you should list your income and your outgoings, such as food, clothing, car costs, travel, energy bills, and leisure pursuits. The point being that you should organise your finances to make sure your spending never exceeds your income.


If you overspend and incur an overdraft, for example, you will incur interest charges, especially if you have not cleared this in advance with your bank or building society.

Nowadays regulations ensure the full cost of borrowing or going overdrawn is fully explained beforehand. For savers, the law also requires banks to quote the rate if you held the product for a whole year.

With a loan this is called the APR, the “annual percentage rate”.

For savings it is called the AER, the “annual equivalent rate”.

If you do decide to take out a loan it is important to consider other features, such as how much the repayments cost every month and the length of the loan.

With savings, you may want the option to withdraw interest monthly or leave it invested to receive a higher level of interest. The APR or AER enables an easy comparison of the loans or savings, so you can see which is the most expensive or cheapest in real terms.


To rent, buy or perhaps stay living at home is a tricky decision. Moving away from a parent in your twenties and moving in with friends or living on your own can be an attractive option. However, you have to consider rent levels in your area or if looking to buy, interest rates which will determine the amount you pay for your mortgage.

Owning a home will require a significant upfront deposit of at least 5%. And if you rent you will need to provide at least one month’s rent in advance.

The benefit of renting is the flexibility to move at short notice, and less responsibility in terms of repairs and maintenance of the property. Most tenancies for private residential accommodation are known as ‘assured shorthold tenancies’, which usually last for six or twelve months before being renewed or terminated.

If you are using a letting agent to find a suitable property to rent, these are recognised associations that you may find useful:

Membership of one of these organisations guarantees you recourse to the Property Ombudsman, a free arbitration service which should be able to help if things go wrong. It is a legal requirement for all lettings agencies to be a member of a legal redress scheme so that you have an appeal mechanism if you feel your landlord is not treating you fairly.


In addition to the monthly rent, other costs likely to be incurred are:

  • Agents’ fees: These can be incurred for services such as undertaking credit checks and the cost of preparing a tenancy agreement.
  • A holding deposit: This is to secure the property you wish to rent and to have it removed from the market. The sum will normally be deducted from the security deposit or the first month’s rent. If you don’t go ahead with the tenancy having handed over this money, you will forfeit it.
  • Security deposit: In addition to your first month’s advance rent, most tenancies will require you to pay at least a further deposit to cover damage to the property or contents during your residence and cleaning costs at the end of it. If there is no damage to the property, or any damage is made good, this deposit should be returned to you.
  • Miscellaneous fees: These could include fees such as an “inventory fee” for checking the contents of a property, particularly if it is furnished. An agent may do this either before or after you have moved in, or both. Do make sure the agent gives you a list of anything that you might be charged for and that you are happy with it.


Before you decide to buy, you must work out how much you can afford.

First time house buyers often don’t realise that there are so many extra costs when calculating their overall budget, so find out as much as you can about what’s involved before you start house-hunting. An independent financial adviser or mortgage broker would be able to take you through the process and help you make the right decisions. You can also get a general idea of what you can afford and what your payments will be by using our online cost calculator. Other useful online resources include, and, which provide an estimate of house prices in an area or on a specific street.

  • Buying is an attractive option. You are putting your savings and earnings into something that you are likely, ultimately, to own outright. You can view our range of mortgages here.
  • Most house purchasers buy with a mortgage: a loan from a mortgage lender (usually a bank or building society) that is secured against the value of the property and paid off over a pre-set term. Once the loan is fully repaid the property is yours.
  • When you buy a house, the mortgage repayments are just the start of your expenditure. You are responsible for the maintenance of the property and, if anything goes wrong, it is up to you to sort it out. You will also need to insure the fabric of the building and it makes sense to insure the contents too.
  • If you fall on hard times and don’t keep up the mortgage payments, you could lose your home and the money you invested in it. Selling is not always an option if the property has fallen in value or becomes difficult to market.


The Government has made significant changes to pensions, including the age at which the State Pension can be claimed. Whilst saving for your retirement always seems such a long way off, you should, if and when you can, start putting as much as possible aside for your retirement. Of course, money saved in a pension plan is tied up and for most people, cannot be accessed until the age of 55 (rising to the age of 57 by 2028).

Your future financial security is just as important as your current situation, and the earlier you start saving the more time your pension will have to grow. A good pension income will give you much more choice about how you spend your retirement. See the Pensions Advisory Service website for further details.

If you have any questions about what you've read, please call our friendly team on 03300 244612.

Family Building Society
Ebbisham House
30 Church Street
Surrey KT17 4NL
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