Know your budget

Use recent statements to record take-home income, regular bills, debt payments and spending that varies. Include annual and occasional expenses rather than treating a quiet month as normal. Moneysmart’s budgeting guidance recommends checking statements and recording when expenses fall due, as well as their amounts.

Choose a consistent period for your working budget. If your pay arrives fortnightly but a bill is annual, make that difference explicit. A handwritten sheet is fine if you can follow it and update it. The aim is to see what remains after the life you actually lead has been paid for.

For example, a household might look comfortable until car servicing, school expenses and visits to family are included. Those are useful discoveries before choosing a loan repayment. Separate spending you are willing to change from costs or commitments you need to preserve.

List the money available now, money already committed elsewhere and money you are still working towards. Keep a proposed deposit separate from buying costs and the cash you want available after moving. Using the same savings figure in every category makes a plan look stronger than it is.

An emergency reserve is intended for urgent, unexpected costs. Decide what would leave you comfortable if an essential repair or income interruption arrived soon after settlement. That is a different job from paying for furniture you would like to replace eventually.

If family assistance forms part of the plan, clarify its terms and availability before counting it. Ask your broker what evidence the lender needs. Record questions about repayment or ownership separately for appropriate advice; a casual conversation is not enough detail to build a purchase around.

Create a buying-cost list alongside the property price. Ask for figures relevant to your purchase for conveyancing, inspections, lender charges, applicable government charges, insurance and moving. Keep estimates visibly marked until you have a current quote or an authoritative calculation.

Do not deduct a grant or concession simply because a friend received it. Ask which current rules apply to you and the particular property. Leave the amount unresolved until that has been checked.

Consider the timing too. Ask your solicitor or conveyancer and broker which payments are needed before settlement and how the remaining funds will be arranged. A total can look affordable while money is unavailable on the day it is needed. Write the due dates beside the amounts.

Replace the current housing arrangement with a realistic ownership picture. Include the proposed repayments and investigate council charges, insurance, maintenance and any body corporate costs relevant to the property. Keep everyday spending in view so the mortgage does not crowd everything else off the page.

Use repayment estimates to explore different borrowing amounts and interest rates, with your assumptions written down. Then ask your broker to explain the lender’s assessment separately. A calculator does not approve a loan, and an approval does not decide what feels comfortable for your household.

Test the plans you already know may change. If one buyer expects to study or reduce work, discuss how the budget would look then. You do not need to predict every surprise; you do need to notice when the plan depends on everything staying exactly as it is.

Take your working budget to the finance conversation. Show what is confirmed, what is estimated and what you have left out because you need help. Ask for the purchase range to be tested against those details, then revisit it when a real property brings more precise costs.

The detailed guides below help you work through particular budget questions. Keep the overall picture beside you as you read, so solving the deposit question does not hide a repayment or buying-cost problem.