Do a lifestyle audit before buying your home

If you're looking to buy, now's the time. According to Rhys Dyer, CEO of ooba Home Loans, the current lending climate and willingness from banks to provide 100% home loans is working in your favour. However, having your financial affairs in order is a must. A lifestyle audit helps you understand what is needed to get that set of keys in your hand. Making changes based on your audit will ensure you reach your goal. De Lucia Group explores the steps you need to take for a successful audit.

Step 1: Identify your end game

First, understand what property move you want to make. The type of home, size, area, renovations and future upkeep, and changes in your family structure are important factors to consider. You can search for ideal properties online and get prequalified to know what you can realistically afford. You can use ooba's free affordability tool to find this out in minutes. 

Step 2: Evaluate your finances

With your dream home firmly in mind, take a hard look at your finances. Print bank statements, credit card statements, and dig up old receipts and bills. It's important to determine how much you can afford to put aside each month to pay for your home loan. If you're going to struggle, this point might be the time to consider sharing the cost with your partner, friend, or family member. Also, use this step to consolidate your debt. Student and vehicle loans, for example, all add up to huge monthly costs. However, a single monthly payment can make it easier to pay off your total debt at a lower interest rate.

Step 3: Create a budget - and stick to it

After understanding your income and expenses, you can use this plan to maximise your savings each month. A budget comes in handy here by tracking your spending patterns and pinpointing places where you can cut down. This can take some discipline on your part, but once you see your savings grow, it will be worth it. 

Step 4: Cut back on luxuries 

Your budget will reveal areas where you can economise. Instead of eating out or buying takeaways, dine at home and pack your own lunches. Instead of using Uber to travel around, start a carpool. By downgrading or even opting out of memberships and subscriptions, you can save even more money. Netflix and gym time can be swapped for Tubi and a jog in the park. And if that doesn't make a dent, you can sell unneeded items.

Step 5: Start a side hustle

Still find you're coming up short? With COVID-19 boosting South Africa's gig economy and remote working opportunities, you have the chance to make extra cash. The trick is to find something you're passionate about that fits in with your skillset. You could become an Uber driver, tutor online courses, or pet/house sit. 

Step 6: Switch your insurance plans

Every year, your contract with your short-term insurer is automatically renewed. However, it might no longer be the right fit for you. Consider shopping around and sourcing quotes for a new insurer for your household contents, vehicle, or business. An even better idea is to seek the help of an insurance broker and financial advisor like De Lucia Group. They can help you save on your premiums each month and even help you get better service. 

Step 7: Save in a bank account with good returns

Be picky with where you choose to place your money, and you'll reap the rewards. Explore the options banks offer to see what can help grow your money quickly. Placing a deposit in a tax-free account, for example, means you won't have to pay income tax as your money grows. While you're at it, close any unneeded accounts to curtail further expenses. 

Step 8: Build up your credit score

Your credit score impacts your chances of securing a home loan. First, check your credit score by applying for a credit report from a recognised institution. Then work on ways to improve it as required. Creating 'good debt' you can afford to pay off helps you show lenders you can be trusted with a loan.

Becoming a homeowner is the ultimate dream. And, with market conditions working to your advantage, there's no time to wait. Carrying out a lifestyle audit and making positive changes will put you firmly on track. View De Lucia Group's properties for sale. Then send a message to De Lucia Group, call Michael De Lucia directly on 082 493 1089, or email michaeldl@delucia.co.za for more advice.

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