The importance of budgeting is for newly-wed homeowners. There are now bills to pay, including property taxes, homeowners' insurance, as along with utility bills and repairs. There are a few simple ways to budget as a new homeowner. 1. Keep track of your expenses It begins with a detailed review of your expenses and income. You can do this with an excel spreadsheet or a budgeting application that automatically monitors and categorizes your spending patterns. List your monthly recurring expenses like mortgage or rent payments, utilities and debt repayments as well as transportation. Add estimated costs for homeownership such as homeowners insurance, and property taxes. You could also add the savings category to help you save for unanticipated costs like a replacement of appliances, a new roof or large home repairs. Once you've tallied up your anticipated monthly expenses subtract your household earnings from that figure to determine the percentage of your net earnings that should be allocated to essentials, needs and debt repayment/savings. 2. Set Objectives The budget you create doesn't have to be rigid. It can save you money. You can categorize expenses by using a budgeting program or an expense tracker sheet. This will help you keep an eye on your monthly expenses and income. The most expensive expense for homeowner is your mortgage. However, other expenses like homeowners insurance and property taxes may add up. The new homeowners will also have to pay for fixed charges like homeowners' association dues as well as home security. Once you've established your new expenses, create savings goals that are specific, quantifiable, achievable pertinent and time-bound (SMART). Keep track of your progress by keeping track with these goals monthly or every other week. 3. Make a budget It's time for you to draw up budget once you've paid off your mortgage or property taxes as well as insurance. This is the first step in ensuring that you have enough cash to pay your nonnegotiable expenses as well as build savings and debt repayment. Start by adding up your earnings, including your salary as well as any side business ventures you have. Add your household expenses from your income to find out how much money you're able to spend every month. We recommend applying the 50/30/20 rule to your budget that gives 50% of Spend 30 percent of your earnings on wants 30 percent on your needs and 20% to fund the repayment of debt and savings. Do not forget to include homeowner association costs and an emergency fund. Keep in mind that Murphy's Law is always in play, so having a slush fund will help protect your investment should something unexpected goes wrong. 4. Save money for additional expenses There are many hidden costs with homeownership. In addition to the mortgage payment and homeowner's association fees, homeowners must budget for insurance, taxes, utility bills, and homeowner's associations. To become successful as a homeowner, you must ensure that your household income can cover all of your costs of a month and leave some funds for savings and other fun things. First, you must review all of your expenses and identifying areas where you could cut costs. Like, for instance, do require a cable service or can you cut down on the amount you spend on groceries? After you have cut back on your excessive expenses, you'll be able to use this money to start a savings account or even invest it in future repairs. It is a good idea to save 1 - 4 percent of the cost of buying your home each year for maintenance-related expenses. If you're looking to upgrade something in your home, you'll need to ensure you have the funds to do it. Find out about home services and what homeowners are saying when buying a home. Cinch Home Services: does home warranty cover the replacement of electrical panels an article similar to this can be a good reference to learn more about what is and not covered under a homeowner's warranty. In time appliances, kitchen equipment and other items you frequently use will undergo a significant amount of wear and tear and will require replacement or repair. 5. Maintain a checklist A checklist will help you stay on track. The best checklists are those that include all tasks and can be broken down into smaller and measurable goals. They are simple to remember and can be achieved. The list may seem endless however, you can start by deciding on priorities based upon requirements or cost. As an example, you could think of planting rose bushes or purchase a brand new couch but remember that these less-important purchases are best left to the last minute while you're still working on getting your finances in order. The planning of homeownership costs such as homeowners insurance and taxes Great site on property is also important. By adding these expenses to your budget, you'll be able to prevent the "payment shock" that can occur when you change from renting to mortgage payments. This cushion could mean the difference between financial anxiety and comfort.