A home is a significant financial investment, and likely the biggest purchase most people will make in their lifetime. Before you buy a home, it’s important to factor in all the costs associated with ownership and the cost of living. We’ve created this Monthly Home Budget Planner outlining the costs you can expect after the sale has gone through. Filling out this printable budget planner will help you gain a clearer picture of your monthly cash flow – what’s coming in and what’s going out – to keep your finances in order and avoid being “house poor.”
To use this Monthly Home Budget Planner, be sure to include all of your fixed expenses, such as your mortgage, property tax and property insurance payments, as well as variable expenses related to your home and otherwise, such as home maintenance and repairs, groceries, transportation, uninsured health services and transportation costs. You should also keep track of how much you’re spending on entertainment – an expense that is, thankfully, 100 per cent within your control! This includes dining out at restaurants, vacations and shopping splurges. Keep in mind that your specific situation may have additional expenses that you will need to account for.
Financial institutions suggest that your total housing costs should not exceed 32 per cent of your monthly income. Your total monthly debt payments should not exceed 40 per cent of your monthly income.
Once you have accounted for all of your possible expenses, you’ll have more insight on what a realistic monthly mortgage payment would be under your specific circumstances. Of course, it’s always a good idea to consult an experienced financial advisor to help with the number-crunching. Understanding your budget allows you to choose a home that you can afford to live in, not just buy. Share this number with your real estate agent to give him or het a price range for potential properties to show you. Keep this monthly budget planner template on hand, to ensure you stay realistic, on track and accountable.
How to stick to a budget
Budget planning is something that is important throughout home ownership. Thankfully, technology today makes it easier than ever to stay up to date on your expenses, making it foolproof to stay within a set budget. Consider apps like Mint, MoneyWise, or Expensify to help track expenses and act as an online home budget planner.
Now that you have the tools you need, it’s time to get started. Remember to be honest when creating your budget – even if it means you’re forced to admit you likely don’t need to buy that $5 coffee each morning!