Keeping a Money Journal to Save For a New Home

Published by julia | Filed under Buyer / Seller Tips, Miscellaneous, Real Estate

The idea of saving is one that moves like a roller coaster. There are times when the average American is saving more than they are spending and there are times when they are spending more than they are making. These ebbs and flows are what make the markets rise and fall. In order to save for your next home, a money journal can be the key to saving now for a better mortgage later.

The mortgage business is at the heart of the real estate fall. Mortgages were approved for people who could not afford to pay for the homes. Suddenly, more homes were being bought up by the banks because the payments were not being made and the market was flooded with lowering prices and more stagnant homes.

The banks decided to pull the bottom out of the subprime mortgage market and the fall began. Today, the real estate market is at an all time low, but that does not mean the conservative person cannot save enough money to afford the home of their dreams.

The money journal is a written account of all the money coming into the home and going out of the home. Kind of like a diet journal, seeing the money and all the avenues it is being spent in, will help to focus the saving for a down payment on a home. The money journal needs to have four columns. These columns are income, savings, necessity and extras.

The income column will note all of the money coming into the home. This money needs to be accounted for in the three remaining columns. Basically, if the three spending / savings columns are added together, the total income should be reached.

Once the income is noted, the necessity column will include all of the household bills that are required monthly. These can include the utility payments and food bills. The extras column should have a budget assigned per month. This gives the person a goal to stay within when spending money on things that are not a necessity.

The savings column is the most important. The more money that appears in the savings column, the closer the potential buyer will be to affording the home they want to buy. While there is a goal assigned to the savings column, this goal can be surpassed to make the mortgage more affordable. Remember, the more money put down on a home, the less the mortgage payment will be each month.