With the current heat-up in the real estate market, I thought this would be a timely article. Buying a home is surely a great achievement for you and the rewards can be very exciting. There's so much you can do now that you have this asset under your belt.
What you'll now realize, however, is that your bank account has started to behave erratically! You're seeing money moving out of your account faster than ever before. Or so it seems.
What you're experiencing is a clear case of a budgeting dilemma for a first time mortgagee. It's completely normal to feel like you've lost some control over your finances now that you're a home owner.
The good news is that you can learn how to budget all over again. It's certainly going to be necessary for a positive mortgaging experience.
1. Make your mortgage payment first. If you want to continue to hold on to your home, ensure you pay your mortgage on time! Remember the home is yours and you want to keep it that way. As soon as you get your pay check, withdraw the amount you need for your mortgage.
• A great idea is to set up an automatic payment to the mortgage lender/creditor from your checking or savings account. That way, you won’t have to worry about remembering to make the payment each month.
• Obviously things come up in everyday life, but defaulting on your mortgage payment could mean not having a roof over your head!
• Avoid using the equity in your home as a cash advance. Stay as far from additional debt as possible. This is one issue that helped cause the housing bubble/crash. Learn from previous mistakes of those who came before you.
2. Prioritize other expenses. With the house payment out of the way, you now have to manage all the other expenses that come along with being a homeowner.
• All expenses related to the new home are important. However, you need to ask yourself if all of them are necessary right now. Focus on the recurring monthly expenses that contribute to a comfortable place to live.
• Social time is certainly important, especially when it comes to maintaining your sanity! But try to cut down on entertainment expenses. Instead of going to the movies 3 times per week, go out once and rent a movie twice.
3. Schedule home improvements. As a new homeowner, you'll have the desire on an ongoing basis to make the home more beautiful.
• Make a list of all your home improvement needs and wants.
• Prioritize them, with the ones that make the home safe and livable taking priority over the others.
• Put a schedule in place for accomplishing everything, and tie that into the associated expenses. Your aim should be to commit the same amount of money each month to home improvements.
• If there's something you aren't able to afford this month, simply leave the rest until next month.
4. Make saving a priority. With all that can happen as a new homeowner, it's more important than ever to set aside money in your savings account. Major repairs sometimes need to be taken care of immediately.
• Have the discipline to put aside untouchable savings. That way, there'll be something for rainy days!
Mortgaging a home for the first time can leave you jaded if you aren't able to budget effectively. Pay close attention to the spending of every dollar. Once you've mastered that, you can feel comfortable knowing the financial responsibilities related to your home are well taken care of!