Making a budget for home expenses is one of the first steps a new homeowner should take. While the extensive planning and budgeting for closing costs and buying the home might be over, your new financial life at home has just begun.
To help you get started, here is a basic guide to creating a budget for your home expenses:
Identify your goals
Make note of any financial goals you hope to achieve and when. For example, you might have a goal of paying off your mortgage early, or financing a major renovation project.
Record your expenses
Track your spending for a month to identify the details of your cash outflow. Make sure to include fixed expenses like subscription services and your monthly mortgage payment. Varied expenses, like entertainment, maintenance costs and transportation should also be included at least in estimation.
Record your earnings
Find your exact income amount by identifying all possible sources of money. This could include regular employment as well as gains from selling or renting any assets. Use your net monthly income rather than gross monthly income to account for taxes.
Do the math
To find a basic budget, simply subtract your total monthly expenses from your net income. The formula is: net income - total monthly expenses = budget.
Find ways to improve
Depending on your results, adjust your goals and habits accordingly. For example, you might want to change your spending habits or put aside more money into savings for an emergency fund.
These are only the basic first steps to creating a household budget. You can use this process as an example for building your own budget and managing your finances in your new dream home.
About the Author
Carolyn Ross
Carolyn Ross spent her career in the advertising world as a commercial photographer. She is no stranger to meeting challenging deadlines and working with many people in a fast paced environment.
She has shot for various magazines such as Architectural Digest, Boston Globe Magazine, Wellesley Weston, South Shore life as well Boston Magazine to name a few. Her love of homes and visual spaces has evolved through the years and has lead her to expand her career. She currently serves on the board of a national organization: The American Society of Media Photographers for the New England chapter. She has been involved in the school art programs as well as teaching photography classes.
Carolyn's expert knowledge of staging and art direction is what differentiates her from other agents. She has also taken her keen business background and artistic talents to successfully renovate numerous investment properties in the Metrowest area over the last several years.
This is what inspires her and with determination and passion, she will bring these unique skills to your next real estate transaction.
