Making a budget for home expenses is one of the first steps a new homeowner should take. While the extensive planning and budgeting for closing costs and buying the home might be over, your new financial life at home has just begun.
To help you get started, here is a basic guide to creating a budget for your home expenses:
Identify your goals
Make note of any financial goals you hope to achieve and when. For example, you might have a goal of paying off your mortgage early, or financing a major renovation project.
Record your expenses
Track your spending for a month to identify the details of your cash outflow. Make sure to include fixed expenses like subscription services and your monthly mortgage payment. Varied expenses, like entertainment, maintenance costs and transportation should also be included at least in estimation.
Record your earnings
Find your exact income amount by identifying all possible sources of money. This could include regular employment as well as gains from selling or renting any assets. Use your net monthly income rather than gross monthly income to account for taxes.
Do the math
To find a basic budget, simply subtract your total monthly expenses from your net income. The formula is: net income - total monthly expenses = budget.
Find ways to improve
Depending on your results, adjust your goals and habits accordingly. For example, you might want to change your spending habits or put aside more money into savings for an emergency fund.
These are only the basic first steps to creating a household budget. You can use this process as an example for building your own budget and managing your finances in your new dream home.
About the Author
Ryan Christensen
Responsive, Responsible and Resourceful - How Real Estate Should Be. This is the foundation of our continued success: responsive service, providing accurate and timely information, and demystifying the process. 100% of my business is referral based because I listen to my clients' needs and exceed their expectations. As a full-time real estate broker, I am the best advocate for both my buyers and sellers. I am always available, regardless of the time of day.
Being a native Southern Californian is a tremendous advantage. I know the area. Time is more valuable than money, but neither can be wasted. And, I'm a fan of hard work. My clients can enjoy their home buying and/or selling experience because I provide a trusting, focused, straightforward approach. I look forward to helping you achieve your goals and find joy in homeownership.
I am both a licensed Real Estate and Mortgage Broker. Others choose to concentrate on one or the other. I provide a higher level of service and expertise than those who do not obtain this dual skill set, which differentiates me from other service providers. My decisions and advice are based solely on what is in the best interest of my clients. I use Real Estate Sales as a tool to make sure my clients get the home that meets or exceeds their needs. As a Mortgage Broker, I search for the best loans so I can offer lower rates and pricing than my financing competition. This certainly IS in the client's best interest.