If you’re like most people, you don’t have an unlimited budget. But you are also a dreamer, have goals, and a vision of how you would like the future to unfold. For most people, home ownership is one of those goals. It allows you to have a “pay yourself” investment that builds equity, like a forced savings plan. You can have the freedom to improve, update, and style your home as you please. Home ownership provides stability, whereas with renting, a landlord could choose to sell the property. You are in control of how the home is maintained when you own a home. The list goes on and on….
BUT sometimes the tricky part is figuring out HOW to become a home owner!
Here are some easy tips to help set you on your way to achieving something that has long been regarded as achieving the American Dream:
- List all of your fixed expenses such as utilities, groceries, student loans, cell phone, car payment, debt payments, etc.
- Estimate irregular payments that you foresee throughout the year such as travel expenses, car maintenance, taxes, etc.
- List every other expense that is more of a “nice to have” and not a necessity such as beauty expenses, coffee from Starbucks, entertainment, shopping, etc.
- Label your expenses as A- needs, B- needs but can be more efficient with (such as grocery shopping, utilities, etc), C- wants
- Total your expenses and see if they are close to or more than your NET income (what you take home after taxes). If your expenses exceed or are very close to exceeding your income, then it’s time to reassess your spending habits and make cuts from your B’s and C’s.
- Create a plan to save X amount each month to help build a down-payment nest egg so that you can become a home owner, and pay your own mortgage! Stop making your landlord rich by paying his or her mortgage for them!
- Make all of your reoccurring payments automatic! This ensures that you never miss a minimum payment or payment to your car, cell phone, utilities, etc. and helps protect potential for you to make an error and ding your credit score!
- Sign up for your bank’s automatic transfer program and move a % of your paycheck into your savings account each paycheck! You’ll be well on your way to saving big $ with zero effort!
- Ask for discounts! Ask your insurance company for any discounts or special programs you may qualify for. Call your internet company, cell phone provider and other service companies you pay for to see if your job has affiliate discounts, or if you can negotiate a better plan!
- Think before you buy! To resist impulse buys, wait 24 hours to buy an item. It may turn out that you don’t need it after all!
- In most cases, if you have to finance it, you can’t afford it. The main exceptions to this rule are homes and cars.
- Set some goals and use a helpful budget tracking app to help you achieve them!
For more information on this topic, I would love to chat!
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