Purchasing a home is no small feat. It’s the largest purchase most people will ever make and if you’re in the market for one, you may want to tighten the purse strings in preparation. In addition to the costs that are associated with a home purchase, you should also be prepared for the additional expense that comes along with being a homeowner. Things like regular home maintenance, such as roof repairs, replacing the water heater, fixing the dishwasher, can all add up, which means your current budget may need some adjusting.
Fortunately, making a budget is easy. Following the budget requires commitment and discipline. Here’s a few tips to consider when creating your own household budget.
Know how much money you have to work with
Add all your monthly sources of income to determine the amount you’ll have available. This would be the amount of money you get paid during the month after your payroll taxes are taken out.
List all your non-house related expenses
This includes EVERYTHING you spend money on, including food, clothing, entertainment, medical bills, cell phone, etc. Be sure to include an allowance for long term savings and as well as an emergency fund.
Figure out the cost of the home you’d like to purchase
Your employee home ownership advisor can help you estimate a proposed mortgage payment for a home in the price that suits you. Don’t forget to include the property taxes, homeowner’s insurance and any mortgage insurance premium that you may have. Items such as costs for utilities, a savings account for home maintenance, extra transportation costs should all be included.
Once you have all the numbers together, you’ll be able to see how much money you’ll have left over at the end of the month. Now that you have assigned a purpose to every dollar you have coming in; you can feel confident in your ability to purchase your new home. Just be sure to have a savings account to help when life throws a curve ball.
Now that you are the proud owner of a well-balanced budget, you can eliminate some stress and live a happier life!