New To Budgeting? Here’s How To Create A Concise, And Accurate Monthly Budget So That You Can Keep Your Monthly Spending On The Right Track

The first thing that one should do when looking to buy a home should be to go straight to the bank and see what you’d be able to be approved for. You should also have been checking your credit beforehand, as this will also be a major factor in whether you can buy a home, and for how much you’re able to borrow.

You cannot figure out how much of a loan you need without knowing how much you can put down. The downpayment is crucial, as the amount of money you have for it drastically increases or reduces your monthly mortgage and interest payments. Many people do not have 20% to put down on the house they want. Here are some tools you can use to save up money for the house you want.

velkaantuminen-tasaantunut-uusilaina

The very first thing you should do is take a look at your budget. If you don’t already have one (tsk-tsk), now is the time to start. There are many great apps that you simply download on your phone that will calculate your budget for you. By budgeting, you will see exactly what you spend each month, and see how much you have leftover to put in savings.

Another useful advantage of these apps is that they show you pie charts or bar charts, that let you know what percentage you’re spending in different categories each month. When you see, for example, that you’re spending 40% of your income on shopping, it brings you a little further into reality that you can cut back in this area. Many times, people don’t realize exactly how much is going to certain unnecessary categories, such as dining out too frequently. Now, you don’t have to go overboard and never leave the house, but it will force you to decide if you’d rather be able to purchase your dream house, or go on a 2 week vacation. Budgeting helps you set your priorities so that you can save money.

Many people don’t check their bank account often, as they believe they know how much they make and have a general idea of what they spend, and have never had any financial issues. The problem with this, is that without making a concrete list of what they spend, they don’t know exactly how much money they can save each month.

It is natural to get excited when you get a bonus at work, or a great tax-return. The general reaction is to buy something special for yourself for working hard, or just out of excitement that you have extra money. Keep in mind, that instead of buying the newest flatscreen out there, you could put that few thousand dollars into your savings. A house is a much better investment than a television.
year-end-bonus

Realize that it is OK to buy non-brand things such as food. Even if you’ve been buying Coke instead of Chek soda for years, don’t nix the thought of switching over. Changes in your grocery shopping can save you a very large amount of money in the long run. Keep in mind, that you don’t need to do this forever, but tell yourself that it is a simple sacrifice to buy a home, and that you can return to your normal food brands after you’ve moved in.

Take a long hard look at your rental apartment or house. Do you need all the extra space? Do you have to have an apartment with top of the line appliances? People spend most of their income on rent. You should strongly consider moving into a less appealing apartment for a little while so that you can save a few hundred dollars each month. Another useful tip is to try to get some extra hours in on the job. If you are paid by the hour instead of a salary, this is a great time to work a little more each month. An extra hour here, and two extra hours there will make a big difference.

r68937gdnjc

Sometimes peer pressure by friends can cost you money you shouldn’t spend too. Let them know that you are saving for a home, and that you won’t be able to accompany them on their shopping sprees at the mall, and that you may have to skip a girls or guys night out every once in a while. If you let them know beforehand, they’ll be understanding and not try to convince you to go out that weekend. Happy house hunting!

Posted in Blog.

2 Comments

  1. Great article. I’ve been saving for a while, but am not quite there regarding the house that I really want. What if I don’t have enough money for the downpayment? I have a fair amount, but not 20%. I have about 16% to put down on the home. Is that OK?

    • Hi Robert,

      When it comes to a down payment, there is not necessarily a percentage that is “OK.” Twenty percent is the ideal percentage you should put down on a home to get the best rates. If you have a little less than that like you do, you’ll be paying more each month than you would if you had a larger down payment. If one has barely nothing to put down, that’s when the buyer has to look into other types of loans besides from a traditional bank. These are harder to get approved for, and will end up costing you a lot of money in interest and other fees down the line.

Leave a Reply

Your email address will not be published.