Introduction
The purpose of this book is to support you during the home buying process. My hope is that this book will inspire thoughts, answer questions, maybe give you more questions, and above all help you make the most informed decisions about your new adventure of owning a home.
I have had many life experiences that have led me to become passionate about sharing insights in the home buying process. My family and I were survivors of the 2008 housing crisis which caused a cascade of events that led to several stressful years while we recovered from the financial hardship we experienced.
When I began looking for a home I wanted to make sure I was informed on all the decisions I would face, but it was hard to find clear and thorough information on the process. I was able to reach out to some people I know, research on the internet, and learn about what questions to ask from my friends, family, and network. I definitely couldn't have successfully bought my first home without a village of people giving me advice. You can't ask what you don't know. So, I want to share the lessons I've learned, from my research and my personal experience.
I wrote this book to help others have equal access to the information of buying a home. After working with a few of my friends in their home buying process they encouraged me to write a book. I am so grateful they gave me the confidence to do this. Throughout my career I have also worked with many people in various aspects of the home buying process such as building their credit scores, understanding interest rates, and financial planning. I have attended home buyer boot camps and am lucky to have a lot of financial experts and realtors in my life. I hope this book helps you learn some common obstacles and what questions to ask to make thoughtful decisions throughout this journey.
I couldn’t have written this book on my own, so I want to thank the following people who helped me throughout my journey:
Rose Cronin
Jerry Cronin
Michelle Byerley
Haley Degenhardt
Salma Abadin
Corey Boyles
Anna McWhirt
Linda Nguyen
Jeff Uren
Micheal McMahon
Alee Quick
Bill Quick
Dianne Lee
Bruce James
Bill Wallace
Richard Powers
Mike Pierce
Bill Quick
Dianne Lee
Barb Holden
Ty Holden Jr.
Ty Holden Sr.
Midwest Bank Centre - First Time Home Buyer Boot Camp
Bank Midwest
Beyond Housing
EHome America
Budgeting
When you first start to budget, it can feel like the fun is taken out of life. Budgeting takes time, puts limits on what you want to do, and can be a real downer – or so it feels. What you don’t expect is that this will ultimately set you free.
Let me start by explaining some advantages of budgeting. If you're prepared for unexpected financial emergencies your stress levels will do a lot better knowing that you can cover it. A lot of research has suggested that stress is very dangerous for us, especially for a long period of time. Let’s try to reduce it as much as possible by hoping for the best, but preparing for the worst. So, how budgeting will be fun is that it will allow you to afford the things you want, reduce your stress levels, and allow you to do the things you love.
There are budgeting templates below that I hope will be helpful in your exciting budgeting journey. When you write in your categories, start with the mandatory items, for example rent, utilities, food, etc. For a category that you don't use every month, such as “clothes,” estimate how much you spend a year and divide that by 12 for your monthly budget. Once you have all your categories, add up your total monthly expenses. Now, you can subtract your expenses from your income and see how much you have left over each month.
Next, add your line items for fun and non-mandatory categories, including money for entertainment, traveling, etc. Adjust your budget on those items based on how much you want to save each month depending on how much you want for savings and your down payment. If you want to buy sooner than later, then consider cutting expenses in non-mandatory categories. If you’d rather have more money for fun now, and buy later, then do that! This is your life and it’s important that you do what makes you happy. It’s also important that you find your own personalized way to budget your money to obtain your long-term goals.
To track your expenses on a weekly basis, make a spread sheet with all your categories on the left column and days of the week on the top row (see example below). Be sure to write down what you spend in each day and then add them up at the end of the week. Do this each week and see where your spending lands in each category for the month. At the end of the month, you might discover that you are over budget in restaurants and you are way under budget in your grocery shopping. It's important to know where your money is going. An old research professor of mine used to say, “If you can't measure it, you can't control it.” And we can measure our spending, so we can control it.
Keep in mind that the general recommendation is to have SIX MONTHS' worth of expenses saved up. If you can’t do six months' worth of expenses at least try to save an emergency repair fund that would cover major appliances, the roof, or other items that might need to be fixed in a home. When looking for a home, add up how much large appliances might cost to repair and make sure you have some savings to cover those repairs. I had a friend who bought a house that had a few AC units and when they all went out at the same time it was a huge expense at once. So, begin with the end in mind and hope for the best but prepare for the worst.
Lastly, determine how much you want to save up for your down payment and remember there are a lot of closing costs. Be aware that closing costs are set by the banks, but you will also need money for other fees during the closing process. Fees during the closing process include inspector fees, appraisal fees, and a few others depending on your needs. At closing, you will need your down payment, title fees, and might also need a year's worth of taxes and insurance depending on your escrow requirements. Be sure to ask your bank what you will need and what your escrow requires.
Some money-saving tips:
Unsubscribe from apps or platforms that you don’t use
Start with small saving goals like saving $20 a week vs $80 a month
Track your budget on a daily basis
Use the 24 hour rule before you purchase anything that might be unnecessary
Only purchase clothes that will be first in your closet - that you absolutely love
Buy higher quality clothes, they usually last longer and save more money in the end
Buy sustainable / zero waste items (reusable wrap, glass containers instead of plastic bags, reusable water bottles, etc)
Shop at farmers markets or co-ops - they are a lot cheaper and you are supporting your local community
Buy necessary items in bulk
Make sure to re-check the insurance rates each time your policy is up for renewal (car, renters, etc.)
Preventative healthcare: Maintaining a healthy lifestyle will save you a lot of medical bills throughout your life
Budget templates:
