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5 Home Buying Budgeting Tips

Sep 27 2018

Blog Image Buying a home is one of the biggest financial transactions you will make in life, and preparing your budget beforehand makes for a much smoother home buying process. Here are 5 tips and suggestions can help you get your budget in order before you make the all-important transaction.

1. Organize Your Finances

Knowing how much you have in just your chequing and savings accounts isn't going to cut it when budgeting for home buying. Ask yourself these two additional questions:

- How much do you spend on household expenses each month?

- Do you have any high-interest and credit card debt?



It’s important to get a clear idea of where ALL your money goes in order to figure out what you can afford and what your home buying forecast looks like. Financial Consumer Agency of Canada suggests breaking down your finances into three categories:

1. One-time expenses: Down payment, legal fees, closing costs

2. Ongoing expenses: Mortgage payments, home / property insurance, utilities

3. Occasional expenses: Landscaping fees, additional furniture and appliances

With your finances categorized and organized, you can start to set goals for how much you need to save, for how long and where you need to cut back.

Download Financial Consumer Agency of Canada's Household Budget Worksheets here

2. Calculate


Before you set any home buying goals, do the math to figure out how much you can afford and can't afford. This will also determine how much you need to save. More than likely, your mortgage payment will be the biggest expense when it comes to home buying. Very few people can afford to buy a home without borrowing some money from a lender. So for most Canadians, the home-buying journey really begins by getting a mortgage.

First, see how much you currently spend on a monthly basis. Consider organizing expenses into 4 categories:



After you've added up your monthly spending, subtract the total monthly spending from your total monthly net income (the amount you earn on a monthly basis after taxes and deductions). The difference will be the money you have left each month after expenses have been accrued.

Now that you have organized your finances and calculated what you can and can't afford, you can get a general idea on how your budget will look and if you meet the affordability guidelines and qualifying for a mortgage.

3. Set Goals



While the ultimate goal is to buy a home, setting smaller goals along the way will help you stay on track and feel more confident along the way.

As you set goals, remember that they don’t have to be solely focused on saving. Just as important is setting goals to cut back on spending. Things like switching to a cheaper gym, enjoying free activities and finding cheaper alternatives to your everyday products can help tremendously in the savings long-run.

4. Write Your Budget

The calculation is done, goals have been set, so now it’s time to write your monthly budget. There are three important categories you should take into account:

1. Total savings for each month

2. Life expenses: Food, insurance, utilities, transportation

3. Any additional expenses for the month: leisure, entertainment, personal



Plan and allocate your budget accordingly to what you feel is reasonable for your needs. If you find yourself spending too much or saving too little, head on over to the next step.

5. Update And Reassess Regularly

The final step is holding yourself accountable to your goals and constantly reassessing your budget. If you make a purchase that wasn’t planned for, add it to your budget and re-adjust how much you’ll be able to save that month.



Remember that a budget is just a plan, and there are many unexpected things in life that can throw your numbers off. If you go over budget one week, try to subside it in the following by allocating more into your savings or spending less so you can stay on track for the month.

Try to get into the habit of budgeting now so that you’re prepared for these financial challenges when they inevitably pop up.

6. Bonus Step

Now that you`re done budgeting and finally have your finances in check, it`s time to look for your dream Maple Crest home! You can find a great selection of single family homes with attached garages, laned homes with detached garages and value rich duplex homes with front attached garages; an excellent selection where almost any sized family can find the ideal home for their needs and a price that comfortably fits their new home budget.