Budgeting for Homeownership

So, you want to own a home? Congrats on embracing adulthood—or at least pretending to. But before you start picking out paint swatches and Pinteresting DIY projects, let’s talk about the unglamorous (but essential) part: budgeting.

Step 1: Know Your Numbers

Start by calculating how much you make, minus what you spend. Sounds basic, but you’d be surprised how many people forget this step. List your income and fixed expenses—things like rent, utilities, and your Netflix subscription (let’s not kid ourselves; it’s a necessity).

Step 2: Save Like It’s Your Job

For homebuyers, the magic number is usually 20%. That’s your down payment goal if you want to avoid private mortgage insurance (PMI). But don’t panic if that feels unattainable—there are options for smaller down payments, and even no down payments in some cases. The key is to save consistently. Treat it like a recurring bill. You’ll thank yourself later when you’re not living off instant noodles.

Step 3: Prep for the Extras

Owning a home isn’t just a mortgage payment. There’s property tax, insurance, maintenance, and the inevitable "oh-no" fund for when your HVAC gives up mid-summer. A good rule of thumb? Budget 1% of the home’s value annually for maintenance.

Step 4: Cut the Fat

Review your discretionary spending. That daily Starsucks latte habit? It might be sabotaging your house goals. Swap a few luxuries for homeownership savings. Or, if you’re not ready to give up your oat milk flat white, just be honest with yourself about what’s worth the trade-off.

Step 5: Get Pre-Approved

Once you’ve got your budget in check, connect with a mortgage broker (me). A pre-approval not only shows sellers you mean business, but it also tells you what you can realistically afford. Spoiler alert: it might not be your dream mansion, but it’ll be yours.

Budgeting isn’t flashy, but it’s the foundation of homeownership. Nail this, and you’ll be one step closer to owning your piece of the American Dream—and maybe even that dream kitchen.

Need help crunching the numbers? I’m just an email away.