In the current economic climate people are thinking about budgets and Needs vs. Wants. So I wanted to share this guest post to help out those of you have have just purchased your first home and are in this situation…Enjoy!
Homebuying is a big investment and an important undertaking. It is also a chance to look at your financial picture and make some key decisions about the future. Are you a young couple just starting life together and thinking about your first home? Are you getting close to retirement, or dreaming of it, with the kids long since having grown and gone? The particulars of each one’s situation will differ according to their life stage, and in each case their future will be what they make of it.
If you are in the position of being able to afford anything you like, you are in control. You can satisfy your wants, the luxuries that make living easier or nicer. Your needs will be easily met and you will be able to tell yourself, “I’ll buy it.” If you are under a tight budget, you will have to prioritize.
It is all too easy to overbuy when interest rates are favorable and the market seems rigged in favor of the buyer over the seller. Even if it is truly a terrific deal, keep in mind that the economy and the market fluctuate over time. Avoid wanting too much.
Now let’s look at some essentials that fall into the “needs” camp. If you are young and just starting out, this is a good time to sit down with your spouse and discuss how many children you would like to have. A family needs a secure home. You don’t want to need a bigger house too often for another baby expected. Do you manage a home business? If that is the case, you will need a home that will allow an office and storage and work areas.
Next, look at things in the “wants” category. Look at how you live. If you entertain often then you might need to focus on a house with a formal dining room and a kitchen or a backyard deck and a pool. Alternatively, if you don’t see this playing a major role in your activities, then focus on alternative pursuits. A rec room? An area for doing work on cars? Accommodations catering to a hobby or interest are a luxury, you must admit, and should be handled accordingly for evaluation in finding their place in a priority list.
The boundary differentiating wants and needs will vary significantly depending on different individuals’ incomes, family size and interests, and their future plans. This is a good time to sit down with pencil and paper and get out in the open just what it is that you really need, and put the needs first, and then list your wants in their proper order. Only when you get this list firmly in mind will you be in a good position to go out and start the hunt in earnest.
Content furnished by Automated Homefinder, the Denver home experts of Colorado.
Photo Credit: Redvers