A Simple Five-Minute Budget Check
This exercise won’t replace a detailed budget or a conversation with a lender, but it can give you a helpful starting point.
1. Write Down Your Monthly Take-Home Income
Use the amount that actually reaches your bank account after taxes, insurance, retirement contributions, and other paycheck deductions.
If your income changes from month to month, use a conservative average rather than your best month.
2. Add Up Your Regular Monthly Expenses
Include your normal expenses other than your current housing payment:
- Electricity
- Water and sewer
- Natural gas or propane
- Trash service
- Internet
- HOA dues, if paid separately
- Routine maintenance
- Future repairs
- Lawn care or pest control
3. Decide What You Want to Save Each Month
Think about the goals you want to continue working toward after buying a home.
These might include:
- Emergency savings
- Retirement
- Paying off debt
- Travel
- Education
- Giving
- Home improvements
- Other future goals
4. Leave Yourself Some Breathing Room
A budget that works only when nothing goes wrong is probably too tight.
Decide how much you would like to have left after your regular bills, savings, and housing expenses are covered.
This gives you room for higher utility bills, vehicle repairs, medical costs, home maintenance, and other expenses you can’t always predict.
5. Estimate What Is Left for Housing
Start with your monthly take-home income. Subtract your regular expenses, savings goals, and the breathing room you want to keep.
The amount left gives you a starting point for the total monthly cost of housing.
Enter your numbers above to see your estimated housing budget.
Create an All-In Monthly Estimate
Before deciding whether a home fits your budget, write down each part of its estimated monthly cost.
A lender can estimate the loan-related expenses. You can research the others by reviewing property information, requesting utility history when available, asking about HOA dues, and gathering insurance quotes.
The goal is to compare homes based on what they may cost you each month—not simply what they cost to purchase.