Our House-Buying Budgeting Hack

How we buckled down and got serious about our budget before we bought our first house!

We bought a house at 23!!!

Okay okay, technically Bryan was 22. But his birthday was literally 4 days after closing day so who’s counting? ;)

*Disclaimer, I realized I have way too much to say about this topic and don’t want a single blog post to drag on and on for ages (we’d run out of coffee before it was halfway finished), so I will be breaking up our home-buying journey into several parts.*

We’ve officially been living in our first house for just over a month and we’ve almost been homeowners for 2 months. It’s been such an exciting and happy time and we’ve received many congratulations and well wishes along with some “wow, and at such a young age!” comments. Of course, most of those comments have come across positively. And I just want to let the world to know that if you work towards and plan for it YOU CAN BUY A HOUSE. No matter how old you are.

There. I said it.

Here’s the deal. Bryan is incredible at tracking and saving money. It’s one of his God-given talents (and thank goodness because me…not so much). His ability to work the numbers and plan for this and that is what got us to this point. He’s such an angel gosh, how did I get so lucky?

The point is, we had planned on staying at our apartment for at least 3 years while we saved up and navigated where life was going to take us, because truly, ya never know people. Back in February of 2018, we started doing a little digging into our finances and did a little bit of research on the real-estate market in our area just out of curiosity. To plan for the future. Like I said, totally Bryan’s thing.

We ended up discovering that if we stayed at the apartment where we were living, we would be wasting upwards of $10,000 a year on rent! $10,000 a year!!!!!!!!! That number straight up blew my mind and made me so angry. You might be thinking “uhh duhhh Sydney” but my mind just hadn’t thought of the numbers in a big picture kind of way until Bryan helped me see it. It was at that point that we really started working the numbers and trying to see if we could move up our timeline a bit.

Through our research, we came up with an estimated monthly mortgage payment for the East Texas area and we began subtracting what we were already paying in rent from the estimated mortgage payment, and setting aside the difference in a savings account to put towards a down payment.

Once again, Bryan’s idea and smartest. decision. ever.

If there’s anything I would recommend from our home-buying experience, it would be this: as soon as you start to consider buying a home, do your research and start living, saving, and spending LIKE YOU ALREADY OWN A HOUSE. Subtract your monthly rent from your estimated monthly mortgage, and set it aside in a savings account (even better if the savings account earns interest) to put towards your down payment in the future.

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EXAMPLE:

You live in an apartment and pay $900 a month in rent. You would like to start planning to purchase a home and after researching, you figure your monthly mortgage is going to come in around $1500 considering factors such as purchase price, interest, etc.

1500-900 = $600 per month that you should start saving! And don’t touch it for any reason!

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This will simulate what it would be like to actually have that $1500 monthly payment BEFORE you’re actually locked in at that rate. A trial run of sorts.

Give it a couple months to see how saving the extra money instead of spending it will affect your spending in other areas (maybe you have to eat out less or cancel a subscription or two to make ends meet). The great thing is that at this point, everything is easily adjustable.

If you can’t live on that budget, then you know you either need to A) Make more money (good luck!) B) Lower your purchase price or C) Give it some time.

The results? You might see how tight things will be on this new budget and decide to hold off for a while (and still try saving as much as possible) – that’s totally okay! Everyone is at different places at different times.

Or you might just realize that you can totally make it work and that your dreams might have the possibility of becoming reality much sooner than you expected! I’m not saying if you plan this way that you will magically be able to buy a house. I understand that rent and real estate prices vary greatly depending on where you live. But I strongly believe this planning and saving method can be a true eye opener for anyone looking to purchase a home BEFORE you begin the purchasing process, and I think it’s a great first step to realizing how you can make it happen.

Also, some of you might read this and think that it’s common sense, but that’s okay. Being married to Bryan has opened up my eyes to how planning and budgeting can make a huge impact on your financial situation in ways that I had never thought of before! So even if it helps one person to take a look and their situation and make some plans for their future, then my job here is done!

Whew! Does any this make sense? Does it help you? Let me know your thoughts or if you have any other great planning and budgeting tips for the house-buying process in the comments!