Welcome to Money Matters: GLAMOUR’s weekly dive into the world of finance. We’re chatting all things personal finance, from contracting rights in the workplace to expert mortgage advice and saving for your first home, to ISAs and dealing with debt, to help empower you to make better choices. Now more than ever it's important to understand our money, but so many of us feel as if we don't have a handle on it – or worse, feel anxious and scared about money.
So each week, a woman in a unique situation will give us an honest breakdown of her finances, and our expert will tell her easy tips on exactly how to tackle it. So, take a seat, and let’s talk about money…
Let's talk money.
MY ACCOUNTS
Current account: £2345
Savings account: £5466
MY INCOMINGS
Annual salary pre-tax: £26,000
Annual salary post-tax: £21,178
Monthly wage pre-tax: £2166.66
Monthly wage post-tax: £1764.83
Other incoming payments: N/A
MY OUTGOINGS
Rent/mortgage: £500 per month (I pay £250)
Bills: £200 (I pay £100)
Splurges: I spend about £60 on takeaways per week.
Other: N/A
Any student loan/credit cards/overdrafts etc: My outstanding student loan balance is £31,000.
MY MONEY THOUGHTS
My worst money habit: Ordering takeout instead of cooking the food I've already bought!
My biggest money worry: Not having the financial stability to buy a house on my own.
My financial hopes for the future: Not having to worry about how I'm going to afford a house.
Current money mood: 😑😔😫
WHAT MONEY EXPERT ALICE TAPPER SAYS:
You don’t have to buy
It feels almost shocking to say, but you don’t have to buy a house. The idea that home ownership, a hugely expensive financial commitment, has been sold to us as ‘the next natural step’ is extremely unhelpful. Yes, it can be a really great way to build equity in something and reduce the amount you pay on rent, but if your rent is quite low and you’re not sure whether your partner is the right person to buy with, then I wouldn’t rush this decision.
If you’re not sure…
You’re right that if you’re not quite sure that your partner is your ‘forever’ or at least ‘for a very long time’ person, then buying together is probably not a good idea. Because buying together is so much easier than buying alone, it’s easy to see it as a ‘no brainer’ decision – if you can then why not? However, it’s important to take a long-term view - buying and selling houses is expensive, particularly so when it’s a result of a relationship breakdown.
The conversation
If you decide that it’s a safe enough choice and an imminent break-up is unlikely, then here are some things to remember. Firstly, if you do split up and you’ve got a mortgage together, it’s important to remember that you will be ‘jointly and severally’ liable. This means that if one of you stops paying his or her part of the mortgage, the other will have to pay the full amount. Because you’re not planning on getting married, it’s important to get legal advice and have a conversation together to figure out what would happen in the event of a breakup.
Legalities
If you were to buy together, a solicitor will help you draw up a legal agreement called a declaration of trust, which basically says when and how the property can be sold, how much notice needs to be given if one of you decides to end the arrangement, rules around first refusal to buy and how the proceeds should be divided up upon selling. If you’re worried about additional assets beyond a house, then you can ask your solicitor about a cohabitation agreement.
Don’t rush it
Take your time as you make this decision together and try to take a 5 to10-year view. Where do you want to be? Do you see yourself together? Would it be possible to buy alone with the help of schemes like Shared Ownership and the Lifetime ISA? You’re doing well to save - although it might be worth unsubscribing from takeaway promotions ;).
