It’s now 2021, and many are starting to think seriously about resolutions, and while the most popular resolutions aren’t disappearing (eat healthy, get fit, etc.), if you’re looking to buy a home this year or next, at least one of your goals should be on financial resolutions. Starting the year off on the right foot financially can set you up for success and get you closer to that goal of buying a home.
Here are some financial resolutions to make if you want to buy a home this year:
Track your spending
Sounds easier said than done, but it’s impossible to get a handle on your financial situation if you don’t know what the situation is. This is why you should be tracking your spending, and see where the opportunities to cut back are.
The key to successful tracking is to create a spreadsheet and manually input every purchase (or even use a money monitoring app). Once you track your spending for a month, time to dive into the numbers and see how much you’re spending on necessities vs how much are you saving vs paying down your debt, etc.
Cut back unnecessary spending
The benefit of tracking spending is it allows you to see where you can cut back. If you’re serious about buying a home, you need to pad your savings account and reduce the spending on ‘wants’ immediately. Cook at home instead of eating out as often. Cancel the gym membership and watch YouTube videos on getting fit. Downgrade cable to basic. There’s many options to reduce and help you save more.
Clean up your credit
Your credit score is critical to not only getting a mortgage, but determining how competitive your interest rates are. A good credit score can save you thousands if not more over the course of your loan, which is why you want to get it as high as possible before you purchase a home. Get your credit report, check for any errors. They may be more common than you think. Then, contact the credit bureau and any other debtors you need to to fix the issues.