30/12/2021
It’s everyone’s favorite activity: budget making! Okay, it may not be your idea of a good time, but if you want to buy a home in these economically straining times you need a budget. Not only will it make it way easier for you to go through the mortgage process, but you’ll be able to clearly understand how much you can afford. Here’s how to make a budget:
1. Gather all of your financial statements: Get the paperwork from your savings and checking accounts, credit cards, car loans, paychecks, everything.
2. Calculate your income: Make sure you record your net income, with all the taxes taken out, here rather than your gross income.
3. Create a list of monthly expenses: Groceries, rent/mortgage, utilities, insurance, and gas are all common expenses, but don’t forget to factor in things like savings, subscriptions, and entertainment costs.
4. Determine fixed and variable expenses: Some things are the same every month like your insurance cost and your Netflix bill. But other things like groceries and utilities change.
5. Total it up: Add everything together to get your monthly income and expenses. Then subtract your monthly expenses from your monthly income to see how much wiggle room you have.
6. Make adjustments: Once you’ve gone through the budget process, you’ll have a good idea of what you’ll need to adjust going forward.
Making a budget is a crucial part of getting ready to buy a home. It’s not always the most fun process, but it can help you get into the home of your dreams.
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