If the past year has proven anything, it’s that we’re all human. Most of us make mistakes at one time or another — and often, those mistakes are with money. That said, here are four common mistakes that can have far-reaching effects on your ability to buy a home and have the financial peace of mind you’ve dreamed of.
Having no money set aside for emergencies. If you have a philosophy of spend today, save tomorrow, you may be very unhappy with your choices in the event of a major setback, such as a large medical bill or costly car repair. Everyone should have at least three to six months of living expenses in a savings account for the unexpected, including a job layoff. If you’re purchasing a home, you’ll also want to make sure that you have enough in savings set aside for unexpected home repairs — they do happen.
Spending too much. It’s so easy to spend and so hard to save! Sometimes it’s hard for middle-income families to remember that it’s not what you earn, it’s how much you spend and what you save that determines your level of financial security. Increasing your income over time won’t provide your family with financial security unless you are able to effectively manage your spending and create and stick to a monthly budget. There’s no shortage of examples of celebrities and sports stars who made millions but ended up broke because of lavish spending.
Loading up on consumer debt. American families are loaded down with a wide variety of debt. The average household, for example, carries credit card balances of nearly $7,000, owes nearly $28,000 in car loans, has nearly $47,000 in student loans and has a remaining balance of nearly $190,000 on their mortgage. If you’re dreaming of purchasing a home, you’ll want to limit and have a plan to reduce the amount of your debt. The higher the amount you owe on your credit cards and on auto and other types of loans, the less you’ll be able to qualify for in terms of a mortgage.
Not getting the financial help you need. Working with a financial advisor can help you get back on track and help you view your money differently. With the right advice, you’ll come to see money as a tool that helps you achieve your dreams.
Thinking about buying a home? Let us help guide you in your homeownership journey. Get in touch with us today: http://azeliteteam.com
