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Budgets are like diets…they’re difficult to stick to! Much like diets, however, putting in the hard work and short-term sacrifices can yield amazing results. Every penny counts when you’re working toward a home purchase – and that doesn’t stop once your budget is created.
Here’s how to keep your budget on track to buy a home this year: 
Accountability is Key
You already know how to create a budget. Now, you just have to see it through. Plenty of credit cards can help you track your monthly expenses, but a spreadsheet can produce the same results. Take the budget plan you’ve already crafted and make line items for expenses like housing, entertainment, travel, etc. Then “audit” yourself at the end of every month by reviewing your spending across all of your cash purchases and debit and credit cards. Since you know you’re on a budget, your spending shouldn’t be too off base from your goals…as long as you’re spending consciously. If it is, you know you have some work to do for the next month.
Checks and Balances
Okay, so you went over budget last month on your entertainment expenses thanks to a few birthday parties and a couldn’t-miss concert. No problem. Don’t beat yourself up! The beauty of saving for a home over an entire year is that you have some wiggle room for mistakes – and we all make mistakes. To make up for it, you can scale back your spending in that category, or in multiple discretionary spending categories, the following month to even things out. If that feels like too big of a hit to absorb all at once, you could also divvy the “deduction” over multiple months, or even decrease the amount of spending in that category for the remaining 12 months to balance out that splurge.
Cash is King
An easy way to ensure you stick to your budget as you save for your first home is to use all cash, all the time. Your non-negotiable expenses, such as bills and rent, can remain on your preferred payment methods, as these expenses don’t tend to fluctuate much. However, fees associated with dining out, shopping, entertainment and any other items that distract from your long-term goal of owning a home should be paid in cash. You can do this one of two ways. You can create an all-cash envelope that has your entire discretionary monthly fund that you will utilize for all your spending, or you can create separate envelopes for your various spending categories. Once those envelopes are empty, that’s it for the month. You can make this easier by purposefully leaving your credit and debit cards at home, save for one, in case of emergencies. And, no, a double chocolate chip Frappuccino does not count as an “emergency.”
Teamwork Makes the Dream Work
You may know how to budget, but does your partner? This is a critical detail that is often overlooked when more than one person is involved in a large purchase like a home. We’re so used to dividing our household roles and responsibilities that it’s easy to say “sticking to the budget is your job.” This happens for a number of reasons. Oftentimes one party is better with money, more financially savvy, maybe makes more money or is simply the more responsible one. All that is irrelevant here. Creating a budget, sticking to it and buying a home is a team operation. This savings plan will fail if everyone involved isn’t equally invested in seeing it through and making the sacrifices. We’re not saying your partner is willingly sabotaging your goal of homeownership, but without “the talk” and ensuring you’re both on the same page it’s all too easy to assume this task is the other’s responsibility. Here, too, is where accountability is key. Check in early and often. Ask how they’re doing with their new budget and whether they’re finding any aspects of it challenging, then share the same from your perspective. Owning a home is a huge responsibility, especially for two people. You’ll want to make sure you’re entering this exciting phase as a cohesive unit who’s working toward a greater goal.
Prepare for the Future by Predicting the Future
This isn’t as meta as it sounds. Preparing for the future simply means anticipating costs ahead of time, much like you did when you initially created your budget. Meal prepping on a Sunday night can result in big savings, which means you now have extra dough for that co-worker’s going-away party next Friday. Looking at the calendar and seeing your mom’s birthday is two weeks away can let you know now that you’ll need to pull back some of your spending to ensure your mom will have a nice day and you’ll stay within your budget. We won’t lie. Sometimes preparing for the future means saying “no” or “not right now” to invitations you otherwise wouldn’t have thought twice about. It’s all part of the process, but if you have a keen sense of your social calendar and spending allotment ahead of time, it makes this whole process a lot easier.
The American Dream of owning your own home is completely achievable. With a little accountability, collaboration and creativity, anyone can save for their first home!
