As Matt and I are in the process of buying and closing on our first home, I figured this would be an appropriate post. Although the process has not at all been what we expected it, we are still very excited. Buying your first home is like riding a roller coaster There are many up’s and down’s throughout the whole process. Our biggest concern has been budgeting our money so that we have a nest egg in case something goes wrong or breaks. We decided to do a conventional mortgage, therefore we are responsible for paying our own home owners insurance, property and school taxes every year. This means we need to have excellent budgeting skills!
I used an excel program to add up our monthly incomes. I also used a column for additional income that we might bring in every month from side jobs. Although this is just a budget, we enter in the actual figures we bring in and expended each month, so that we can see how close to the budget we actually were. Below our income I add our expenses. This helps us see where our money is going every month and also helps us save for taxes and fuel oil costs (which can get pricey). The excel program automatically calculates how much cash flow we have at the end of every month after our expenses have been paid.
Another good idea, for people who have a hard time saving, is to have specific payments automatically taken out of your paycheck (car payment or insurance). When you don’t physically see the money, you are less likely to spend it on something else. It is also nice because then you know you can actually spend the money that you received in your paycheck since your expenses have already been taken care of. This is only the case for fixed monthly expenses though.
I would love you hear other ways that new home buyers budget their monthly income and expenses successfully!
Sooner than later,