You’ve probably asked yourself this question a couple of times. You’ve even made a mental computation of how much you earn and the possible savings you can allocate for it. However, no matter how you do the math of readjusting your budget, financing a new home just seems impossible. And you end up giving up the whole idea.
But you should not.
You should not give up, because you can have that new house!
Just follow this budget plan and you will surely be able to pay for your dream home.
If you are an employee with an average income of P20,000, here is a budget plan on how you can
break down your earnings, expenses and savings. This breakdown is most applicable to bachelors, married couple and a starting family.
Food and Recreation
We work so we could have food on our table. That is why, food gets the biggest chunk of our earnings. There is no problem with that. It’s ok to allot a bigger budget for food, especially if you are a starting family. Remember that food is still one of our primary needs.
This food budget includes monthly groceries, daily meals and recreation.
Water and Electricity Bill
This budget is mandatory. Water and electric bills won’t go away. But we can reduce our electricity and water consumption by unplugging unused appliances or turning off the water faucet when not in use. This budget applies to families with minimal number of appliances like TV, refrigerator, fans, desktop computer to name a few.
Transportation and Communication
This includes a month of daily commute from your house and your work. It also includes your daily or weekly phone load and internet. It seems that this takes a big portion of your earnings, but you can’t help it, transportation and communication are important.
Education and Other Emergencies
This 10% budget is most applicable to married couples with kids going to public schools. For those who do not have kids, this can be used for saving for emergencies.
Rent vs Own
Most of us are renting. Whether it is an apartment or a bed space, rent cost is expensive and it takes the second highest portion of our earnings. We all know that renting is impractical. But we don’t have a choice because we believed that this is the only way that we can afford a shelter. We believe that we can’t afford a decent home. But we can. There are now a number of residences that offer affordable monthly amortization. The monthly fee is just the same as renting. So, instead of wasting your money in thin air, why not use it to finance your home.
Of course we NEED to save. Not for a new gadget or new appliances or new clothes. But because we need it for future investments and retirement. No matter how small your savings are right now, time will pass and it will increase.