Eliminate Excess Baggage from your Budget before Buying a Home

When planning to buy a home, you surely need to gather enough money to finance the down payment and closing costs as well as create enough slack in your budget to cover any extra costs that come with home ownership. You can do this by either increasing your income or reduce your spending.

None of these are necessarily pleasant but the latter may be the less difficult option. It is up to you to decide where you are going to cut the excess baggage, but you no doubt need to make them.
The first thing you want to do is to rid yourself of any consumer debt like car loans or credit cards. This first step will go a long way in contributing to your overall financial well-being. Consumer loan borrowing will only facilitate living beyond your means and not saving money.

The astronomical interest rates on consumer loans could destroy your financial health and unlike the interest on a mortgage, it is not tax-deductible.
If you have access to some savings you definitely want to use this to pay down your consumer debts. After all, you are paying a higher interest rate on the debt than you’re earning from interest on your savings. Also, interest on your savings is taxable.

Always make sure, though, that you have some emergency money on hand. 
Another way to cut the excess baggage and make high cost debts disappear is to refinance your high-interest credit cards onto cards with lower rates while reducing your spending in order to free up cash to pay down those debts in a timely manner. You may also cancel your credit cards and switch to using debit cards where purchases are debited from your checking account within a day or two. This will surely help to curb your spending habits.
Look for ways to trim the non-necessary spending that you may be in the habit of doing. Everyone obviously needs to spend on food, clothing, housing, healthcare and the like.

A close examination of your habits will likely reveal a great deal of additional money being used for luxury type spending of non-essential items. 
Get into the routine of purchasing products and services that offer you value. You don’t always have to spend more on quality since higher quality items are a lot of times inferior to lower priced products and services. Also, get used to buying bulk items, since these are usually cheaper per unit when buying in larger sizes. Go to wholesale stores to find deals on essential things that you use. 
Eliminating excess baggage will help you in your new home purchase as well as brighten up your long term financial picture.



About robertjrussellcompanies

International Real Estate Agent * Insurance Broker * Radio Talk Show Host * Public Speaker * find out about me - visit http://www.robertjrussellcompanies.com
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