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.

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.

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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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