How To Budget When Saving For A Home

by Domenico Ceruzzi 11/24/2019

If budgeting isn’t your thing, you’ll be glad to discover that it’s quite simple. There’s a way to categorize your spending and save money easily. If you learn the rule, it will become so automatic that you won’t even think about it. If you’re saving money for a home, this practice will be essential. Break your budget down into three categories: 


  • Living expenses
  • Financial goals
  • Personal spending


Half of your budget should go towards living expenses. This number includes all of the essentials like rent or mortgage, utilities, groceries, commute costs, and insurances. 


20 percent of your income should go towards other financial goals like savings, investments, or paying down debt. Credit card bills, student loans, and other bills would fall under this category. This category is also where you’d save for your down payment, closing costs, and other expenses. This percentage can be adjustable depending on how much debt you have or how much you need to save for retirement. 


The remaining 30 percent of your income can go towards personal spending. This category includes everything that you use your money for but isn’t a necessity. This percentage is also flexible. If your lifestyle doesn’t require you to use all 30 percent each month, you can indeed save more money.


A Clear Plan 


These categories simplify your budget. Even if you make some adjustments to the numbers, the outline truly makes budgeting easy even for the most scatterbrained among us. It allows you to see where your money goes clearly. It also works no matter what kind of living situation you have.


The great thing about this budgeting plan is that you have some future needs built into it. Many times, when we budget, we think of our immediate needs and our shorter term goals. Saving for any occasion can never happen too early. You are able to not only focus on your current goals and the future.   



Steps


First, determine your monthly income. This number is how much money you take home after taxes. From here, you’ll be able to split your money into categories by percentages. If your income fluctuates frequently, you’ll need to take an average of your monthly income to determine your numbers. 


Next, you should take a look at your spending habits. These include everything from your morning latte to your monthly rent payment. From here you can make adjustments. Perhaps you need to look for a less expensive apartment. Maybe you need to cut down your weekly pizza to a bi-monthly purchase. Whatever you see in your finances, a simple percentage rule gives you the tools you need to become a saver and be well on your way to the purchase of your first home.     


About the Author
Author

Domenico Ceruzzi

Domenico was born and raised in central western Italy by the Tirreno Sea. He moved to New York in 1990 where he resided for seven years, then moved to New Jersey; he made his way to the lovely Naples, FL in 2010 and having had the busy metropolitan life experience, he holds a great appreciation for the laid-back Southwest Florida lifestyle. 

He chose real estate as his career in 2004 because for him “nothing is more rewarding than being able to find and deliver a very important part of the American Dream to people, and their appreciation and long-lasting gratitude, in return, is priceless" 

Domenico chose Amerivest Realty in October of 2012 as he was attracted to the firm for its bold market presence and serious commitment to agent support. 

Some tidbits you might find interesting about Domenico: 

He was a paratrooper in the Italian Army with a specialization in drug management. He is an avid scuba diver. He is a well seasoned, fine cuisine, cook. He is certainly a multifaceted man and dynamic real estate agent and Amerivest Realty is proud to have him on the team.