Personal financial management is a serious issue for a lot of people. When it comes to home ownership, there are a lot of considerations that a new doctor needs to incorporate into their budget planning. The ideal situation is to draw up a budget based around the provision of your mortgage payment. Remember that late payments result in extra money having to be forked out and that counts as money wasted. The aim is to be efficient in getting your mortgage payments in on time. However, not many people bother to ask the question “how much should I spend?” when they work out their mortgage payments. Good personal finance habits require that you ask some other important questions that help with the creation of good financial habits, such as:
How Much is the Maximum I Should Spend on Mortgage Payments Monthly?
Most financial experts agree that 25% to 30% of your monthly income should go towards room and board arrangements. If you manage to maintain a mortgage payment that falls inside this bracket, then that is a safe mortgage investment. A payment that falls between 20% and 30% would be ideal, and the lower the payment the better. The major reason for this is that between five and ten percent of your remaining income should be set aside for home improvement and repairs. Unlike an apartment setting, where the repairs fall to the responsibility of the landlord, all your repairs are your own responsibility. As a result, busy physicians and doctors must budget for the eventuality of these repairs (which can be quite costly in some cases). Saving a little extra per month (which falls within about 5% of your income) ensures you have a ready nest egg in case of emergency repairs.
How Do I Ensure I Pay my Mortgage On Time?
Money can be quite hard to manage because of the way it moves so quickly and effortlessly from income to expense. To ensure that you don’t get caught without your mortgage payment when you need it, you could create a new bank account as a buffer. Deposit payments for the first two months of mortgage payments in there and each month afterwards, pay your mortgage payments into that account. This makes sure that if your income should be held up for any reason, you will at least have one month worth of mortgage payments available to you. Planning like this lets you know that you will always be able to pay your mortgage on time and not fall prey to any extra expenditure.
Do I Need A Budget?
Creation of a budget based around a mortgage can seem like a very involved task. It doesn’t have to be. Estimating how much you require over the course of a month is all you need to create a relatively solid budget with a minimum amount of time. After creating your budget categories and assigning percentages, you can simply calculate what needs to go where and assign the correct amounts to the relevant categories. Budgets are not as hard as you may have been led to believe. It’s all a matter of using simple math to balance your money, and making sure that the money that needs to be spent is spent where it’s required. As a home owner, a budget serves to give you security and peace of mind in your financial decisions.
By Mark Neal