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Is it time for a budget review?
How do you know when you have to do a budget review? Some people may cringe at the thought, but the truth is that taking the time to review your budget is an important part of maintaining your financial health. The only issue is it can be hard to know when the time is right. Here are a few situations where it’s worth considering a budget redesign!
Consider your housing plans
One of the biggest reasons to conduct a budget review is if you are about to buy or sell a home. Obviously, these processes involve a lot of money exchanges and it’s important to have the budget to support that. If you’re planning to buy a house, you need to prepare for all the costs involved. This includes your down payment, legal fees, land transfer taxes, moving costs, and utilities, to name a few. If you’re not currently a home owner, odds are you have never had to think about these things before, which means they haven’t been part of your budget. Now, however, you will have to start making room for these costs.
If you’re looking to sell your home as an existing home owner, this is also a good time to review your budget. You can think about how much you’re hoping to gain from the sale, and what your financial plans are after that. Will you be renting, or buying again? Do you want to travel, put money aside for the future, or save for retirement? Depending on what your plans are, this will impact how you should budget.
Do you expect a change in income?
Our budgets surround our income, so when our income flow changes, so does our budgeting plan. It’s normal to experience fluctuations in your income over the course of your life. Whether you are moving to a higher paying job or being laid off, for example, the amount of money you are bringing in is about to change. You can consider how much more or less money you think you will be making in the coming months, and how this impacts your monthly expenses. If you expect an increase in income, you will likely have a bit more budgetary freedom. If you will have less money coming in, it might be a good time to reevaluate your spending habits.
Your personal life is changing
Our money situation often changes with our personal lives. For example, getting married, having children, retiring, or adopting a pet will all influence where your money goes and how you budget. If you’re preparing for a big event like this, it’s time to do a budget review. This might be a review you do alone, or with a partner if you have one. You can think about how your money will be used as a result of these changes, and whether it will impact your budgeting choices. For instance, preparing to have a baby brings in a whole new set of financial considerations you didn’t have to think about before. Be sure to evaluate how any personal changes might affect your financial circumstances.
How long has it been?
Even without experiencing any major changes, it’s important to do a budget review once in a while. In general, a yearly check-in is sufficient as long as your financial situation stays the same. The reason you should keep reviewing your budget is because, like everything else, budgets can get dated. You might have new expenses you didn’t even think about, or old ones you dropped a long time ago. You want your budget to accurately reflect your situation, and this is the time to sit down and make sure your income and expenses are accounted for. Plus, it’s good to check in once in a while and see how well you are following your budget! This provides you an opportunity to make any changes, if necessary.
Get in touch with a broker!
You might know when you should do a budget review, but how are you supposed to get going? The hardest part about budgeting is starting. Luckily, you can always seek out the help of a mortgage broker! We are experts in all things financial, so if you need help creating an accurate budget, we are here for the job. If you’re looking to buy your first home, for example, we can help you determine how much you should save, what costs to expect, and what a realistic buying budget may be. No matter what your situation is, we are ready to help you secure the best budget for your circumstances.
Conducting a budget review might not be the most fun task in the world, but it’s certainly important for your financial health. Plus, it can give you peace of mind knowing you have a good handle on your money. If any of your financial or budgetary goals involve buying a home, we encourage you to reach out to a broker to get started! The spring housing market is in full swing, and we’re ready to guide you through it.
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.