Budgeting Tips for First-Time Home Buyers: What You Need to Know

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  • Buying a home is one of the biggest investments you’ll ever make—be sure to plan ahead and create a realistic budget!
  • Determine your income and expenses to set up a budget that works for you.
  • Budgeting spreadsheets and apps can help you track your finances and stay organized.
  • Set aside at least 10% of your income each month in a savings account for emergencies.
  • Consider refinancing options if you find yourself struggling to make mortgage payments.

So you’ve decided to buy a home—congratulations! It’s an exciting milestone, but it can also be a bit overwhelming. One of the most important steps in this process is getting your finances in order and designing a budget that works for you. Here are some tips to help first-time home buyers create a realistic budget.

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Determine Your Income and Expenses

The first step in setting up a budget is to determine how much money you have coming in each month, as well as what your regular expenses are. This will give you an idea of how much money you can comfortably spend on your mortgage payments each month without overspending.

Don’t forget to factor in other costs such as property taxes, insurance, and utilities—these can add up quickly! In 2022, the average cost of homes for sale is between $300K-$750K. With that in mind, it’s better to be prepared and have a budget that can accommodate the additional expenses. Fortunately, there are several tools and resources available to help people manage their finances and stay on track.

Budgeting Spreadsheets

Budgeting spreadsheets are one of the easiest ways to get started with budgeting. A simple spreadsheet can help people easily track their income and expenses, as well as set financial goals.

One example of a budgeting spreadsheet is the Financial Spreadsheet by MoneyStrands. This comprehensive spreadsheet gives users the ability to track their income and expenses, as well as set financial goals. The spreadsheet includes categories like income, expenses, savings goals, debts, investments, and more. It also provides users with charts and graphs to help make sense of their financial data.

Budgeting Apps

If you prefer a more hands-on approach, there are also several budgeting apps available to help first-time home buyers stay organized and on track with their finances. Popular apps include Mint, YNAB (You Need A Budget), and EveryDollar. These apps offer features such as budget monitoring, bill payments, financial goals tracking, and more. These apps are great for people who want a more intuitive way to track their spending and manage their finances.

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Set Aside Money for Savings

It’s always smart to set aside money for savings when creating your budget. While it’s tempting to spend every last penny on your new home, having an emergency fund will help keep you financially secure if any unexpected expenses arise.

Aim to put away at least 10% of your income each month into a separate savings account so that you’re prepared for whatever life throws at you! This will make it easier to manage your finances and prevent you from accidentally dipping into your emergency fund when times are tough.

When you want to put money away for emergencies, look for a bank that pays you interest on your money. Some banks like Ally Bank, CIT Bank, and Capital One 360 are good choices. They can help your money grow while keeping it safe.

Look Into Refinancing Options

If you find yourself struggling with making mortgage payments after the purchase, look into refinancing options that may be available to you. Refinancing is when you get a new loan to replace your old loan. It can help lower the amount of money you need to pay back each month, or it can make the time period for paying back longer.

Before making any decisions about refinancing, make sure to do some research and consider all the pros and cons before committing to anything long-term.


  • Lower monthly payments or extended loan term
  • Potential to reduce interest rates
  • Can help improve credit score
  • Allows access to cash from home equity


  • Fees associated with refinancing (including closing costs)
  • May take longer than expected for the process to be completed
  • This could result in a higher overall cost of borrowing if not careful

Creating a realistic budget is essential for first-time home buyers who want their financial future to stay secure and stress-free. By determining your income and expenses and setting aside money for savings each month, you’ll be able to create a budget that works best for you and ensures that all of your financial obligations are met without overextending yourself too far outside of what’s comfortable.

Remember—buying a home is one of the biggest investments you’ll ever make! With these tips in mind, it’ll be easier than ever before for first-time home buyers to get started on their journey toward homeownership!

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