Published at: 6/21/2016 3:29:23 PM
One of the best ways of preparing for home ownership is by following a budget.
You’ve probably heard it before –“buying a home is a big commitment”, and yes it is (that’s a no-brainer), but the big question is whether you can manage that commitment. For many first home buyers the real action can start after they have moved into their new place and they’re learning to live with a mortgage.
This is when the habits you’ve developed while you’re saving for your first home can make a valuable difference. Practice makes perfect, and living within a budget now is a smart way to prepare for being a home owner.
Draft a budget
Getting started is easy. Estimate what your likely bills will be. Begin with regular costs like power, phone, internet and council rates or strata levies if you’re planning to buy an apartment.
Next estimate your monthly loan repayments. If you’re currently renting you could find your loan repayments aren’t much more (and could even be less than) than your current rent payments.
Finally, factor in all the different costs that makes up our daily lives – fuel, groceries, insurances, clothing, health and entertainment. Using an online budget planner can make the process a lot easier.
Aim to live within your budget
Is drafting a budget worth the effort? That’s a definite thumbs up.
As well as helping you save for your purchase deposit, your budget will let you see how well your finances will stand up to home ownership. And if you can practice living within your budget while saving for your first home you’re going to enjoy a streamlined transition once you become a fully-fledged home owner.