Millennials everywhere are starting to settle down and have started looking for a house to call their own. However, going from a $600 rent payment to a $1,500 mortgage payment, for example, is a steep jump to make. So it is better to be prepared. Before you take the plunge, consider playing house for a little while to see how it goes.
Playing House
The one way to do this is to download a financial planning app so you can maintain one of the key ratios, paying less than 30% of your salary to housing.
Every month pay your normal rent payment of $600 and set aside $900 in savings. This will give you an idea as to what it will feel like not having that extra $900 in your account.
After the first few months, make some adjustments. You may want to reduce your 401k contributions so you can have more money in your paycheck. You might also have to adjust your savings goals as well because you won’t be able to save as aggressively. The idea is to live like you will once you have your house, only there isn’t as much risk involved. You are basically trying to see if you can survive by paying $1,500 instead of $600.
You won’t have as much spending money, so you will have to cut your entertainment and pleasure spending down significantly. Making those trade-offs will become easier.
Eventually, you will be all ready for the financial aspect of buying a house. now comes the fun part… finding the right house.
