Residential Realty Northwest
Residential Realty Northwest
Mary G Johnson, Residential Realty NorthwestPhone: (503) 313-0688
Email: [email protected]

How To Budget When Saving For A Home

by Mary G Johnson 12/01/2019

If budgeting isn’t your thing, you’ll be glad to discover that it’s quite simple. There’s a way to categorize your spending and save money easily. If you learn the rule, it will become so automatic that you won’t even think about it. If you’re saving money for a home, this practice will be essential. Break your budget down into three categories: 


  • Living expenses
  • Financial goals
  • Personal spending


Half of your budget should go towards living expenses. This number includes all of the essentials like rent or mortgage, utilities, groceries, commute costs, and insurances. 


20 percent of your income should go towards other financial goals like savings, investments, or paying down debt. Credit card bills, student loans, and other bills would fall under this category. This category is also where you’d save for your down payment, closing costs, and other expenses. This percentage can be adjustable depending on how much debt you have or how much you need to save for retirement. 


The remaining 30 percent of your income can go towards personal spending. This category includes everything that you use your money for but isn’t a necessity. This percentage is also flexible. If your lifestyle doesn’t require you to use all 30 percent each month, you can indeed save more money.


A Clear Plan 


These categories simplify your budget. Even if you make some adjustments to the numbers, the outline truly makes budgeting easy even for the most scatterbrained among us. It allows you to see where your money goes clearly. It also works no matter what kind of living situation you have.


The great thing about this budgeting plan is that you have some future needs built into it. Many times, when we budget, we think of our immediate needs and our shorter term goals. Saving for any occasion can never happen too early. You are able to not only focus on your current goals and the future.   



Steps


First, determine your monthly income. This number is how much money you take home after taxes. From here, you’ll be able to split your money into categories by percentages. If your income fluctuates frequently, you’ll need to take an average of your monthly income to determine your numbers. 


Next, you should take a look at your spending habits. These include everything from your morning latte to your monthly rent payment. From here you can make adjustments. Perhaps you need to look for a less expensive apartment. Maybe you need to cut down your weekly pizza to a bi-monthly purchase. Whatever you see in your finances, a simple percentage rule gives you the tools you need to become a saver and be well on your way to the purchase of your first home.     


About the Author
Author

Mary G Johnson

"As a full-time realtor, along with my team at Residential Realty NW, I bring a full range of knowledge and experience, so that I can be both a trusted resource for both buyers and sellers of Portland properties. My professional success comes from my belief in working hard, being consistent with follow-through, knowledge and excitement about the industry, and building a strong honest relationship with the clients I represent. My skills in the art of marketing, vision, and negotiations will guide us through every transaction".

Sincerely,

Mary G Johnson   

Experience: 

Residential Real Estate Broker, SRES, PMAR Master's Circle, licensed in Oregon & Washington  

In-home Design Consultant, Calico Corners, Portland, OR

Merchandise Floor Design/Stage, Wight's Home and Garden, Seattle, WA  

Owner MGJ Media/Advertising, Boise, ID  

Professional Associations:

National Association of Realtors

Portland Metro Association of Realtors Masters Circle

Member Senior Real Estate Specialist

Regional Multiple Listing Services

Oregon Association of Realtors

5 Star Professional Award