How to Budget for Happiness: Buying a Home
Money is a constant stress in many of our lives. We do our best to budget for happiness, but we have all sorts of bills eating at our savings — one of the major ones being rent. Cities all over the country are experiencing major growth, and that is causing rent and the cost of living to skyrocket. It’s hard to stay happy and positive when the place you live in is sucking you dry. It brings about the question: Which is better, renting or buying a home?
Renting or Buying a Home
Whether you should continue renting or look into buying a home is not a simple decision. Which is better will vary from person to person, as life situations are different for everyone. For someone who is not sure where they want to settle and would consider moving for a new job or opportunity to fulfill their dreams, renting is probably the way to go. For those who are ready to settle for the foreseeable future and would like a place they can stay long-term and build a life, buying a house may be the better choice. Personal finances and local housing markets also play a role in the decision.
If you feel like you are ready to buy a home, but aren’t quite sure you have the money to pursue it, you can start by assessing your finances, researching home-owner costs, and setting goals.
Assess Your Finances
Before you can settle on buying a home, you need to take a hard look at your finances. Three things you should look at are how much you make each month, what your average monthly bills and living costs are, and how much you are able to save after that. If you are essentially living paycheck to paycheck with bills and essential living costs, then you need to look at where you can save, such as seeking out different insurance options, paying down debt faster to eliminate high interests, and other ways of reducing your day-to-day spending.
It could be the case that your monthly rent is outrageous, and moving into your own home would be financially smarter. The way to assess this is to look into a mortgage calculator. If you find that a monthly mortgage is less than what you are paying in rent, it might be the right time to look into what kind of houses are available in your budget.
Budgeting for a House
There is much more to owning a house than just being able to afford the mortgage. When budgeting to become a homeowner, you have to take into account other factors as well. When you own your home, you have to take care of all the utilities yourself — something that is typically included in rentals, even if it’s just a couple, like sewer and trash. Additionally, homeowners are responsible for keeping up their own maintenance and repairs. Since these come and go, you can’t really add them to a monthly cost, and rather have to save into a house emergency fund so that when needs do arise, they won’t put you in a financial crisis.
Owning your own home comes with the perk of being able to design it to your own happiness and comfort. While any remodeling is going to cost you as well, you can do it at your own pace so you can save money and take the time to contemplate what kind of changes you want to make.
Budgeting for Life While Saving for a Home
Saving to buy a home while covering living costs can make it seem like there is no room for fun purchases or activities. Even little comfort purchases like a latte from a coffee shop can seem like frivolous spending when you are trying to save. While seriously saving money does require some daily sacrifices, you shouldn’t let it make you miserable.
Make compromises rather than completely limiting life’s little pleasures. If you were a daily coffee-shop drinker and have decided that’s an area you’d like to save in, give yourself a few times a month to treat yourself to a latte, while making coffee at home the rest of the month. Same goes for eating out: it’s a great money saver to cook at home, but allow yourself takeout or go out to a restaurant once or twice a month to reward yourself with a break from cooking at home daily.
Buying a home is a great goal to have, but it definitely takes some assessing of your current situation and finances. But if you feel ready to settle and make a home for yourself, you can make it happen by getting started on budgeting and saving for your future happiness.
About the Author
Avery T. Phillips is a freelance human being with too much to say. She loves nature and examining human interactions with the world. Comment or tweet her @a_taylorian with any questions or suggestions.