Renting vs Buying Your Next Home – (part 1) My Spending Diet
June 9, 2015
Rent or buy your next home; which is best for you? Before you can determine the answer to this question there are two things to consider: your finances and your living lifestyle. Once you understand these to components, you will have a better vision on what you can afford and how best to make your money work for you.
Ask yourself, “Do I know where I stand financially?” If you do, GREAT !!! You are a step ahead in determining if you should rent or a buy your next home. If you don’t yet know where you stand financially then allow me to offer some guidance and to share with you somethings that worked for me.
The starting point in renting vs. buying is understanding our finances but specifically having control of your current debt obligations and budgeting the monies you receive monthly. Track all monthly debt obligations and develop and implement a plan to reduce debt before adding new debt obligations. Another key consideration is to understand how to effectively budget the money you have coming as as well as going out.
One thing that I have struggled with financially is budgeting and understanding exactly how much money I receive monthly and how much money goes out. For me to really understand my finances and how to make it grow I knew I had to understand my money and create a budget that I would stick to. The key here is sticking to the budget.easier said than done right?… Like many of you I have tried time and time again to follow a monthly budget only to find myself ashamed with a room full of department store bags.
Until one day I decided to just spend like I always did but to keep all of my receipts and look over all of my debt statements for one month. I always looked at my money like…”girl your main bills are paid…you have some money in your savings account…your GOOD to go shop and treat yourself! “ Initially I thought my spending habits where pretty darn good because when I would buy things like clothing or shoes (because that’s what I love to buy) I would by things that are on sale. In my mind buying something on sale allowed me to tell myself that the purchase was justified even necessary!
At the end of the month I gathered all of my receipts and debts and entered them into a spreadsheet. After reviewing the spreadsheet I was sick to my stomach; I could not believe how much money I spent on stupid stuff like eating out, treating friends, buying clothes or shoes, or just letting friends and family borrow money. This was a big eye opener but I had to see all of my spending in black and white and in one place. Just looking at how foolishly I was spending a lot of my hard earned money made me realize that a change was in order.
It took for me to not look at my money plan as a budget. Something about that word was scary and intimidating. But when I called my plan as a spending diet, I found more success. And it’s kind of cool too…my spending diet to become financially fit. After analyzing my habits and found some of the bad expenses I was forced to go on a spending diet! Now with every purchase I ask myself, “Will this help or hurt my diet.”
Now I have a monthly plan and I know exactly how much I will allow myself to spend on the foolishness and the rest would go to more responsible things such as bills, savings, and investments. I feel confident in my spending habits now and in the fashion world you look way better when you are confident and so does your living lifestyle!
Take control of your spending habits and spend like a Fashionista…with confidence. More money leads to homeownership which is one of the fastest ways to build your empire!! Register today to attend our home buyer’s readiness workshop: https://roccityrealty.com/buying/buyers-seminar/ and learn more about becoming financially fit!
ROC City Realty “Your Real Estate Fashionista!”