The importance of budgeting is for newly-wed homeowners. It's now time to deal with bills like property taxes and homeowners insurance and monthly utility bills and potential repairs. It's good to know that there are easy tips to budget as a first time homeowner. 1. Track your expenses Budgeting begins with a review of your income and expenses. You can do this in an excel spreadsheet or a budgeting application that automatically monitors and categorizes your spending habits. Begin by listing your regular monthly expenses like your mortgage or rent payments transport, utility bills, and debt repayments. Then add in the estimated cost of homeownership such as homeowner's insurance and property taxes. Make sure you have a savings category to cover unexpected expenses, like replacing your roof or appliances. After you've calculated your expected monthly costs subtract the total household income to get the percentage of net income which is used for necessities or wants as well as saving or repaying debt. 2. Set Objectives A budget that you have set doesn't have to be restrictive and can help you find ways to save money. Using a budgeting app or creating an expense tracking spreadsheet can help you identify your expenses, so you are aware of what's coming in and going out each month. The most expensive expense for homeowner is your mortgage. However, other expenses like homeowner's insurance and property taxes can add up. New homeowners will also have to pay for fixed charges like homeowners' association dues, as well as home security. When you have a clear picture of your current expenditures, you can set savings goals that are specific, achievable, https://www.easymapmaker.com/map/3439e467e881b1f58b9d3f9ad50c64ac measurable timely and relevant (SMART). Monitor your progress by keeping track with these goals each month or every other week. 3. Make a budget It's time to make budget after you have paid your mortgage as well as property taxes and insurance. It is important to create a budget in order to make sure you have the money you need to pay for your non-negotiable costs, build savings, and then pay off debt. Make sure you add all your income including your earnings, any extra hustles, and the monthly costs. Add your household expenses from your income to find out how much money you have each month. Budgeting according to the 50/30/20 rule is recommended. This allocates 50% of your earnings and 30 percent of your expenditures. You should spend 30% of your earnings on needs 30 percent on your needs and 20% on paying off debts and saving. Be sure to include homeowner association fees and an emergency fund. Keep in mind that Murphy's Law is always in action, so having a slush fund will help protect your investment in the event something unexpected happens to break down. 4. Put aside money to cover extra expenses There are many hidden costs associated with homeownership. In addition to the mortgage payments homeowners must budget for insurance and homeowner's associations, property taxes costs and utility bills. The key to a successful homeownership is to ensure that your household income is sufficient to cover your expenses of the month and still leave some room to save and for fun. It is important to look over all your expenses and look for areas you can cut back. Do you really require cables or can you cut back on your food budget? When you've cut back on your spending, you can put the money into an account for repair or savings. It's best to reserve 1 - 4 percent of the cost of buying your home every year to cover maintenance costs. If you're looking to upgrade something in your home, you'll need to ensure that you have enough money to do so. Be aware of home services and what homeowners are discussing when they first buy their home. Cinch Home Services: does home warranty cover the replacement of electrical panels: a post similar to this can be an excellent source to learn more about what not covered under a homeowner's warranty. In time appliances, household items and other things often use go through a lot of wear and tear. Eventually, they will require replacement or repair. 5. Maintain a checklist A checklist can help to keep you on the right track. The best checklists include every task related to it and are constructed in small objectives that can be measured and easy to remember. It's possible to think that the list is endless, but it's best to begin by deciding on your priorities by need or cost. For instance, you may think of planting rose bushes or purchase a new sofa but realize that these non-essential purchases can wait while you're still working on getting your finances in order. It's also crucial to budget for additional expenses unique to homeownership such as homeowner's insurance and property taxes. By incorporating these costs into your budget, you'll avoid the "payment shock" that can occur when you change between mortgage and rental payments. The extra cushion you have can be the difference between financial ease and anxiety.