Be Rich In Experiences Not in Things

When you’re looking for a new home, it’s important to consider more than just the mortgage payment. You need to factor in other costs such as property taxes, maintenance, utilities and more, which could add up to 35% of your total income. If you buy at the top end of your pre-approval price, it could be setting you up for a future of financial struggle.

It’s important to understand that in life there are many more important things than just having a big house. It’s important to be able to enjoy your life and your home, rather than just struggling to make ends meet. You should aim to find a house that fits within your budget so that you can enjoy the lifestyle that you want, rather than be house poor and unable to enjoy your home.

If you purchase a home at the top end of your pre-approval price, you may find that you have to sacrifice in other areas such as vacation, debt repayment or savings. You need to weigh all of these things up to make sure that you can actually afford the home that you’re buying. It’s important to remember that no matter how attractive a house may be, it’s not worth sacrificing your financial future just to live in the perfect home.

The most important thing is to be life rich, rather than house poor. Finding a home that is within your budget and allows you to enjoy life is far more important than having the biggest house on the block. Think carefully before buying and make sure that you are making an informed decision that is right for you.

Having a Budget

Budgeting can be a simple and enjoyable process, just like a piece of cake or a slice of pie. This pie chart is a tried, tested, and true method for financial success, helping you to easily and quickly break down your overall financial responsibilities into five major categories.

The first category is essential expenses. These are the necessities that you must pay for in order to survive. This could include rent, utilities, transportation, and necessary purchases. Make sure to keep the amount of money you need to cover these costs as low as possible.

The second category is savings. After accounting for essential expenses, whatever is left should be divided between savings and debt repayment. Make sure that you have a proper emergency fund saved, and then set aside money for longer-term goals, such as retirement and buying a car.

The third category is debt repayment. This includes any payments you need to make for credit cards and student loans. Pay off any high-interest debt first, and then work your way down.

The fourth category is lifestyle expenses. This portion of your budget should be used for things like entertainment, eating out, shopping, vacations, and hobbies. How much you allocate to lifestyle expenses will depend on your individual financial situation, but make sure to keep it reasonable.

The fifth and smallest portion of the budgeting pie is for investments. This should include money saved for investments like stocks, bonds, and mutual funds. You should only invest mo

 

ney that you can afford to lose, so start small and work your way up.

Housing – 35%

When it comes to your home, it’s important to consider more than just the mortgage payment. This section of your budget should cover any monetary contributions you make to your home, such as property taxes, water, electricity bills, equipment rentals or maintenance. Your local mortgage broker can give you a better idea of what all these costs will be.

Transit – 15%

Transportation costs can be a significant portion of your budget. This section should include any costs associated with getting around, such as car payments, maintenance, gas, insurance, parking costs or transit passes. It’s worth taking a look at how much you’re spending on transportation each month.

Debt – 15%

Debt repayment should be a priority for any financial plan. Allocate 15% of your total income to this, if you have any non-mortgage debt such as credit cards, lines of credit, or student loans. If you don’t, you can spread the 15% across the other four sections.

By making timely payments and paying more than the minimum, you’ll be able to make progress and eventually be debt-free. The pie chart is a great tool to get you started on budgeting and taking control of your finances. It will help you make sure you’re allocating the right amount of money to debt repayment and other parts of your budget.

Savings – 10%