AUSTIN, TX. – Over the years, one of the most common questions that home buyers have is how do I budget to buy an Austin Texas House? This is an excellent question to have because, you should understand your budget now so that you will make the right offer and ultimately purchase a home that you can afford.
In this article, we will provide you with tips you can use to get started with budgeting even if you’ve never created a budget before in the past.
How to Get Started with Budgeting
Budgeting is important because you have to know how much money you will feel comfortable paying for your principal, interest, taxes and or association dues on a monthly basis.
To get started with budgeting you should first write down what your total debt commitments are on a monthly basis. These debts may include your credit cards, auto loans, student loans and other payments that you have to make.
After writing down your monthly debt payments you will next write down how much you pay for your essential expenses on a monthly basis like groceries, transportation, housing, and utilities.
Besides your debt payment and essential expenses, you will next need to write down payments that you may be making for your lifestyle choices which may include satellite television, smart phone, gym membership and other lifestyle payments like membership boxes and other monthly subscription services.
What You Should Be Paying on A Monthly Basis
Although it’s not always possible for us to eliminate some debts or bills, you can give yourself the advantage financially if you follow the 50/20/30 principle when budgeting:
- 50% of your income should be spent on your essential expenses like your housing costs or utilities.
- 20% of your income should be spent on things like your debt payments and savings contributions.
- 30% of your income should be spent on items like your cell phone bill or satellite TV subscription.
If you find yourself spending more than 50/20/30 in one area of your budget then it’s best to take a step back and review which items you can change because you may be able to do things to save money like switch to another cell phone provider, eliminate your satellite television subscription, or consolidate your credit cards to one card.
Learn More About Budgeting Before Buying an Austin Texas Home
For more information about budgeting before buying an Austin Texas Home, or to view homes for sale in Austin, contact the Kent Redding Group today by calling us at (512) 306-1001 or CLICK HERE to connect with us online.