According to the National Association of Realtors, parents gifting money to their children to help purchase a first home is a common experience. Gifting money is a type of down payment assistance that can help them realize their dreams of homeownership.
Start the new year right: Review your homeownership budget
As a homeowner, having a homeownership budget is a great way to help you save money and reach your financial goals. Understanding your total income and expenses based on your habits will show you the true costs of homeownership and let you adjust as needed.
Start the new year right by reviewing your homeownership budget.
Review what you spent last year
Using receipts or your bank account, review what was spent last year and where. Make a list of categories to help you better visualize your spending:
- Mortgage, insurance, property taxes (including escrow)
- Home maintenance and repair
- HOA dues, if applicable
- Household expenses (food, pet care, etc)
- Entertainment expenses
While you may not have control over what you are spending each month on things like HOA dues, you can find ways to help lower other costs like utilities and entertainment.
The Consumer Financial Protection Bureau has an easy-to-use tool to help you review and build your budget.
Take new expenses into account
Were there any unexpected expenses last year? Do you expect those expenses to occur again this year? If so, it’s a good idea to take them into consideration when reviewing your homeownership budget so you can be prepared.
Revisit your savings
How is your savings account doing? Do you need to start an emergency savings account or recontribute to it? Now is a good time to put any money received over the holidays, like cash gifts or bonuses, into your savings for whenever you may need it.
Be proactive & realistic
When it comes to your homeownership budget and what you can afford, be proactive. Talk to your lender about refinancing your mortgage, take advantage of tax breaks, and do what you can to lower costs where you can. You’d be surprised how much you may be able to save each month!
With a solid homeownership budget, you may see significant savings. With those savings, you can be prepared for your next home project or even buy a new home! If a new home is in the future, you can trust the experts at SmartMortgage.com to help get you get started.