Guest Author - Katie Murphy

So, you want to be a home owner? Congratulations! Did you know, if you look at any ten year period in the past century, you will find an investment in real estate grew? This includes depressions, recessions and economic growth periods. This tells you home ownership is an excellent financial option.

However, you should never look at home ownership as only a financial decision. Home ownership provides many benefits far beyond financial growth. It’s a place you can make your own; raise a family; share precious moments; and, feel safe and secure.

The road to home ownership is a process, which includes preparing yourself both emotionally and financially. There are numerous considerations on your road to home ownership, so let’s take a ride and coast into home ownership?

Today we will take an in-depth look at Step 1…Evaluating Your Financial Health. Come back in future weeks to see what other stops we will make on the road to home ownership.

EVALUATING YOUR FINANCIAL HEALTH

Once you’ve decided home ownership should be in your future, there are a few things you need to do to prepare for it. The first step is to develop a budget. To many people this is a daunting task. Not because it is so hard to do, but rather, because it may force you to look at your spending habits. We all despise giving up the things we love to do or habits we’ve developed, but the benefits will surprise you. Evaluation is an important step in the process.

Set up a spreadsheet if you are comfortable using an application such as Excel ® by Microsoft. However, it is just as effective to take a single sheet of paper and write down your income on one side and your expenses on the other.

This process will be very enlightening. Most people find out they waste a lot of money each month on “stuff” that really does not add anything to our lives. For instance, I write a new budget each year. Every time I force myself to sit down and look at my spending habits, I find out I spend a significant amount of money on nothing.

One of my habits is stopping at DD for coffee. Yes, I love the coffee, but I also enjoy coffee made at home in my own coffee pot. By cutting out the store-bought cup of coffee, I shave about $8.00 per week from my budget. That translates to $416.00 per year. I may be able to overlook $8, but I can’t discount the value of $416.00 added to my budget.

Another biggie is eating lunch out. Check it out and see how much your family spends on eating lunch, or any meal, out. Consider the additional calories consumed and you will realize a big savings in both your life and waistline if you eat more meals at home.

Another bad habit I have is paying for a car wash. I am a Realtor® and must keep my car sparkling to impress customers. I’ve developed a habit of driving through a car wash each week. Did you know it cost $6-$8 to wash your car? That’s $24-$32 per month or $288-$384 per year. I could wash it at home for virtually nothing. And, an added benefit is I might even get a little exercise doing it.

I’ve given you three small examples in my life where I can tighten the belt. There are many more. Sit down and write out your budget and, I promise, you will be surprised at all the little things you can do to make your self financially healthier and simply more aware of your money. This will lead to making decisions which put you on the road to attaining home ownership without sacrificing much. As a matter of fact, you will probably lose some habits you would like to drop anyway.

Instead of paying your landlords mortgage each month, you can begin to make your money work for you by saving for a down payment on your own home.