It is never too late to work on a budget! This is especially true if you are wanting to purchase a home as a current homeowner or a first time homeowner. Establishing a budget does not have to be completely strict and restricted. Having a budget will help you know how much money your household has and where it goes. If coming up with a budget is new to you, it does not have to be a burden or be a scary process. We will help break it down for you. If you have any other tips when it comes to establishing a budget, please share it with us. Just like you, we are always learning and evolving!
To begin the process of establishing a budget, you need to write down all of your finances. This includes all funds you have all over – in your checking, savings, retirement, etc. accounts. Be sure to count for any savings bonds you might have as well! Next, write down all of the debt you have. This debt includes your mortgage loan, your car loan, any credit card balances, any outstanding student loans, etc. Now is time to write down income from all parties in your household. This includes any side jobs or incremental revenue you may have coming in that you do not think about right away. This next part might be the most stressful as next up is writing down your monthly expenses for everyone in the household. This includes fixed and variable expenses. A fixed expense is an amount that stays the same every month. A variable expense is one that changes monthly, such as utilities, gas, groceries, etc.
In an effort to not overwhelm you, we know that was a lot of work, we will carry this back up next week!