Is it time for a budget review?

Should you be thinking about taking on a budget review? As serious as this may sound, evaluating your budget doesn’t have to be anything scary! This is just a chance for you to analyze your current budget, and see if you should make any changes. Staying on top of your finances is the key to reaching many long-term goals, including homeownership. Here are some common signs that a budget review should be on your radar.

What is a budget review?

What does a budget review actually look like? Basically, this is a check-up on your financial health. It’s your chance to evaluate what you have earned, saved, and spent over a specific time period, and the purpose of this is to make sure your current budget still sets you up to meet your goals and financial situation. It’s important to assess whether your current budget meets your needs. Since everyone has different financial goals and circumstances, everyone’s budget review will look a little different.

Has your income or employment changed?

A change in income or employment is a big sign that a budget review should be a priority. This could mean a lot of different things. Maybe you received a promotion and a raise, or took a new job with a higher salary. In these cases, you might have more money readily available to put towards future expenses or goals. If you have the ability to speed up a current financial plan, this is your chance to act on it. On the other hand, perhaps you have recently lost your job or experienced a pay cut. This is not uncommon, but that doesn’t mean it’s not difficult to deal with. A budget review can help you identify areas where you can cut back on spending, or reallocate some of your money to help you handle current expenses. Often, small adjustments can provide you with a cushion until you can regain some stability.

Have your personal circumstances changed?

As we move through life, we go through periods where our personal situations may change. These changes often lead to new financial obligations, even if nothing directly related to your income has changed. For example, you may have recently gotten married, had a child, or gone through a separation. This might mean combining bank accounts, adding on major long-term expenses, or dividing assets. Evaluating your budget will help you determine how you can move forward with your new circumstances in a way that allows you to succeed!

Are you planning a big purchase?

Any time you are planning on taking on a major expense, a budget review should be included. Of course, one of the biggest purchases you might be considering is buying a home! Homeownership is an exciting experience, but it also requires a lot of financial planning. To help you prepare, you can evaluate your budget to ensure you are ready to support a mortgage and make a down payment. You can also learn how much you need to save, and how quickly you can do so. The more you know about your finances as you embark on this journey, the better! This will help you avoid unexpected costs and stresses in the future.

Has it been over a year since your last review?

Even if nothing major in your life has changed, it’s good practice to evaluate your budget about once a year. This helps you stay on top of your finances and ensure you are still on the right track. You may find you have spent or saved a lot more than you anticipated, which can help you guide your future decisions. This gives you the chance to decide if you should make any changes to your current budget, or if you are happy with your situation. It never hurts to check in!

A budget review is a great way to ensure your financial habits match your goals so you can reach those milestones sooner. No matter what has happened in the time since your last review, you will likely find value in evaluating your budget again now. If you’re thinking about buying a home, it’s also important to contact a mortgage broker about your next steps! We can make sure you are prepared for the journey and are set up to succeed.

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.