Selecting a Target Price Range of HomesWednesday, November 18, 2009

Determining the 'right' price range for you can be a challenge - the best place to start is by carefully monitoring your current spending habits for 30 days to see where your money actually goes each month. Surprisingly, most people when asked have no idea how much they spend each month on things such as groceries, going out to eat, entertainment, clothes and so on. The key to figuring out the proper housing payment for you is to know exactly where your money goes and control it by enforcing a spending plan on your spending.

1. For 30 days, track every single purchase you make. The best way to track this is to collect receipts for every purchase (even cash purchases) and tally up the totals each week.
2. Enter the weekly totals into the Spending Plan Worksheet and be sure to record the expenditures under the proper categories.
3. After you have tracked your spending for 30 days. Review the information and start to see where you might be overspending, underspending and so on. This is your chance to take control of your money and start directing it toward the things you really want.
4. Now try to work in a housing payment, keep in mind the property taxes, home insurance and other expenses that go along with a home. You will likely find that you need to reduce your spending in other categories in order to afford the home you are looking to buy.

The great thing about the spending plan is that you will now be able to weigh in all of your expenditures and be able to make decisions on whether giving up a few restaurant visits is worth buying a $225,000 home versus a $235,000 home.

For more information on budgeting and controlling your expenditures - please contact me at 503-488-1818 or mike@strategy7pdx.com.

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