December 10th 2019

Whether you're a first-time homebuyer or secured your dream home years ago, creating a balanced budget is one of them most important skills you can obtain. There are tons of extra costs that come with owning a home, some expected and some not; having a solid financial plan in place can ensure you won't be blindsided when unplanned expenses arise. This applies to newly built homes and older ones, too! Here's what you need to know about creating a budget that will give you the safety net you need:

List Your Expenses

Consult a professional, choose an online program or pick up a notebook that you’ll use to track all your expenses: groceries, savings, restaurants, bills, birthday presents, etc. Be sure to keep an accurate record of how much you allocate for each expense on a weekly, monthly, and yearly basis, as well as how much you actually spend on each expense.

Reevaluate Periodically

Any time your financial situation changes, you should reevaluate your budget. Did you get a raise? How will you allocate your new funds? New expenses arise? Are there areas where you can cut back on spending? Your priorities will change depending on where you are in life and what your current goals are. Reevaluating your budget will make sure your spending habits reflect what you hope to accomplish.

Anticipate Bigger Costs

The 1% to 2% range is a good place to start when it comes to estimating how much you'll spend on home maintence projects. However, higher value repairs that come up every so often should be taken note of. When you reevaluate annually, consider things like roof and/or deck replacements that are necessary every 20 or so years. Try to avoid letting these things come as surprises!

Don't Give Up

It’s natural to miss your budgeting goals every once in a while, especially when you’re first starting out. Just keep tracking how much you really spend on different expenses and, if necessary, rework your budget to something you can work within. 

Overall, remember that life happens. There's no way you can predict everything but being prepared as possible will take a lot of stress off your plate. If things get really tight, there are always options like refinancing your mortgage at a lower interest rate or finding out if you qualify for special options. Be honest with your lender and yourself about what you can afford and find a home that makes both you and your bank account happy.