Is it time to re-evaluate your budget?

Springtime is all about starting fresh and welcoming new beginnings. With that in mind, this season might be the perfect time to re-evaluate your budget. This is an opportunity to examine your current situation, and create a fresh financial plan based on your evolving needs. However, budgeting can be tricky and feel intimidating. Here are some helpful tips to keep in mind as you navigate through the world of budgets!

Who should perform a budget check-in?

Everybody will have to evaluate and re-adjust their budgets at some point! It doesn’t matter who you are, where you live, or what your finances look like. Budget check-ins are critical to financial wellness. However, there are certain groups for whom budget evaluations are especially important. We recommend everyone performs a big check-in at least once a year. Apart from that, proper budgeting is important for home owners, future home buyers, those who have recently experienced a rise or drop in income, people with new and existing debts, and anyone else whose finances have recently changed. Anybody who falls into these categories would do well to re-evaluate their budgeting habits, and consider whether their current situation requires a new budget. You might find you don’t need to make many changes at all, and that’s great! However, if you do have to make some adjustments, this is something you want to know ahead of time.

What should your budget consider?

Most people’s budgets involve the same types of items. Of course, you need to consider your income and expenses, which make up the foundation of your budget. However, we can dig a bit deeper into this. Think about any sources of income you may have, both active and passive. This might include your regular job, side jobs, investments, etc. Your expenses should take in everything from rent and mortgage payments to credit card debts, student and auto loans, utilities, and groceries. Most of us deal with many of these items, even if the specific costs differ. Some of your income and expenses will be fixed, while others might change often. Try to find an average amount for these cases that best represents how they impact your finances.

How do you start?

Even once you know what to include when you re-evaluate your budget, it can be hard to get going. There is no standard template or spreadsheet that applies to every person, and no strict guidelines to follow. A lot of your budget will reflect your unique situation, and therefore it will not look like anyone else’s. However, a basic way to start is to gather all the information you can about your finances, such as all the items discussed above. When you examine your income and expenses, what are you left with after you make your necessary payments? Are you gathering savings, breaking even, or experiencing losses? Is there anywhere you can cut down or eliminate costs? A big part of budgeting is not only considering your current situation, but planning for the future as well. Take some time to think about your future goals and how your budget ties into it.

Does your budget include homeownership?

Speaking of future goals, is homeownership on your list? If so, taking the time to re-evaluate your budget now is extra important! Saving for a home is a lengthy process, and it’s never too early to start planning. Even if you don’t want to jump into the market for several years, incorporating this into your current budget will help ensure you have the savings necessary to buy a home when the time comes. Of course, you don’t have to do it alone! Use a mortgage broker to set accurate goals based on your budget, and work with them to properly evaluate your finances. We can get you on the right track today, so the housing market is less stressful tomorrow!

No one enjoys budget reviews, but it is important to re-evaluate your budget once in a while. Proper budgeting keeps you on track towards your financial goals, and ensures you remain in a financially stable position. If you need guidance on debt, mortgages, or homeownership, your mortgage broker is a great resource. Take advantage of their services and experience so you can feel confident in your finances.

If you have any questions about your mortgage, get in touch with us at Clinton Wilkins Mortgage Team! You can call us at (902) 482-2770 or contact us here.