Congratulations on buying your first home! This is surely a great achievement for you and the rewards can be very exciting. As a homeowner, you have equity that’s solid. There’s so much you can accomplish 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 from your bank account. That way, you won’t have to worry about remembering to make the payment each month.
- Sure, things come up, 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.
2. Prioritize other expenses. With the mortgage payment out of the way, you now have to manage all the other expenses. Now that you have a mortgage, your priorities may likely shift.
- 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 dwelling.
- 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 improvement. As a new homeowner, you’ll have the ongoing desire to make the home more beautiful. While your pride of place is admirable, it’s important to let better senses rule!
- Make a list of all your home improvement needs and wants.
- Prioritize them, with the ones that make the home safe and livable taking precedence 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 improvement.
- 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!