Buying property for the first time...

I had never been so stressed in my entire life... I just received yet another phone-call from the estate agent, telling me it's too late to walk away from the deal. Why would I want to walk away, and what on earth had me so stressed? Not knowing enough about how buying property works, that's what. Again, it's something most people treat as if you DO know, so it can be frustration upon frustration when you have to learn on the fly like we did.

When buying your first property, start off by viewing as many as you can that are in your price-range. Those nifty little installment calculators they have at the top of many property-advertisement apps nowadays is great, but have you considered the rates on that property? Would you need garden services (if you're not currently paying for it) to maintain the place? If it's an apartment, what would the levies be? Are there special levies that they impose from time to time? A good place to start is to allocate at least 10% to 12% of the purchase price of the new property to bond & property costs in your budget, so if that shiny new apartment costs R800 000, as yourself,  do I have R8 000 to spend a month on this property? If not, you know that's a little above your price-range, and you should lower the purchase-budget a little.

Next, ask for the estate agent to give you a brochure to explain what the attorney's fees will be. Remember, there are two sets of attorneys so you need to know in writing how much each attorney will charge before you sign an offer to purchase. You will need to pay this amount up-front along with your deposit.

Deposit? Yes, you will find that there are two types of apartments if you're not fortunate enough to buy a freestanding house as your first property. Share-block properties mean that the apartment block is owned by a company, and you are essentially buying shares in that company, which entitles you to x-amount of floor space. The barrier to entry on a share-block property is very high because they will ask for at least 40% of the purchase price for a deposit.

The other is a Sectional-title apartment, which means you will normally have to come up with a 10% deposit. Bond originators will further add an origination/initiation fee (which also works on a sliding scale according to the price of the property) to the price, which is also payable up front. With all of this, don't be afraid to ask for discounts - your attorneys can give discounts, and estate agents can help negotiate further discounts for you as well. Those who don't ask, don't get!

Great, you have asked all the right questions, you know how much it will cost a month, and you want to sign your offer to purchase. As part of South-African law, you will be entitled to a Certificate of Goodstanding from an Electrical Contractor on purchase, as well as an Entomologist Report to say the place is in good condition, but something else you may want to check if it's an older building is the plumbing. It will cost roughly R500, but having a plumber give you the thumbs up on your geyser, water pressure, and overall condition of the plumbing and attachments will give you peace of mind, and potentially save you some money down the line.

As soon as your offer to purchase is accepted there is a fairly lengthy process that starts where you will be called in to sign the contract, after which you will need to wait 6 - 8  weeks for the transfer to take place. Once this is done, you can arrange to receive the keys and move in! It can be a very exciting process.but it can also be massively stressful to purchase something this life-changing if you don't know enough. I may have left a few things out, but please feel free to leave a comment to let us know if there is anything else you would like to make everyone aware of!

Budgeting and money management

Yup, we've all been there.. end of the month Salty-cracks are no fun. That's why today I would like to start by explaining something so simple that it frequently gets overlooked, but that can have some serious implications if not done properly. You've guessed it - how to set a budget.

I found it's easier when you do a budget on Excel or something similar because of the Auto-sum function, but you can use a piece of paper stuck to your fridge if need be to remind you of your commitments and what you are aiming at with your savings. Yes, savings... It's remarkable how much you actually can save when you're focused on your budget and sticking to it.

Firstly, make a list of all your monthly expenses; groceries and entertainment, fuel, mortgage/bond repayments, insurances, vehicle installments etc. Now divide all these into the following categories:

a)  Necessities: These will include your house/apartment repayments, food, fuel etc.
b)  Financial Priorities: This will be savings, education, internet, landline and/or cellphones etc.
c)  Fun Money: Here you list entertainment, that nice pair of heels you saw, the odd cup of coffee you      pick up on the way to work etc.

Item A should comprise 50% or less of your TOTAL budget. Especially if you live with your partner. I know that no-one likes to think of it, but if unemployment strikes, you need to be able to cut back to the bare necessities, and you may not be able to find a well-paying position again at first. Knowing you will be able to afford your necessities even in hard times helps you sleep better at night, trust me.

Item B should comprise 30% or more of your budget, and the majority of that should be things that can be a buffer during hard times - savings, a good education to help you find a better job, investments etc. Some of this will also go towards paying for 'have to haves', but that won't hurt too much if you had to go without it for a while (while you can't eat Pinterest pictures, you can forego internet for a little while to buy real food). These items (like internet, excessive phone bills, high insurance premiums etc) can all be revisited, better deals can be negotiated, and you can save a fair amount by being sensible on what you spend.

Item C is now entirely up to you. 20% or less of your total budget can be allocated to this section, and is there for you to be able to have the quality of life you can afford and enjoy. It's the fun-money that you go for cocktails with, spoil yourself with, spend with your friends... you get the idea.

It can be helpful to assign a colour to each category for ease of reference, but once you have assessed your financial situation in light of the above you will be better able to make some choices about how you spend, and what your financial future will look like. There are tons of free templates to use on the internet, and even a few easy ones on Excel itself (in the templates section) so I would encourage you to start by at least looking at a few and deciding which one you would like to use.

If you have any tips or would like to share a template/format that works for you, please feel free to leave a comment - we would be really interested to see what is out there!

The things they think you know...

Whether it is buying your first car, your first apartment (or house, if you're lucky enough straight off the bat), doing your tax return, or something as simple as buying a pet, there are things people expect you to know. No one tells you or explains these things to you, because surely as an adult you would have figured this stuff out by now.

Well, I didn't, and neither did my husband. We were just two happy twenty-somethings who wanted to get married and live a fabulous life together. Then real-life happens. Now trust me, real-life is amazing, but this blog will be aimed at making it easier... from planning a wedding, to buying property, buying or trading in a car, or taking care of a sick pet.

Everyone has to learn from mistakes, in this case, it can be someone else's ;)