- 1). List all of the added expenses you will take on when you purchase your home. This includes home insurance, property taxes and home maintenance costs. The maintenance costs depend on the age of your home and your appliances and any work you plan to do to update the home. For an older home, $500 a month is a good starting point, but you may need to increase it if you know your roof will need to be replaced soon or if you anticipate problems with the plumbing.
- 2). Add additional costs you may not have considered to your list. For example, if you do not currently pay for water and garbage service, you will need to add it to your list. Your gas and electric bills will go up if you are purchasing a bigger house. You may also have homeowner's association dues and other fees associated with purchasing the home.
- 3). Look at your current budget and adjust the items you have listed. You can swap out rent for your mortgage payment, but you will need to add in your other fees and expenses. Raise the budgeted amounts for your utilities.
- 4). Subtract your expenses from your income to see if you have enough money to cover the difference. You do not want to purchase a home that will make it difficult to continue to save money and live at your current lifestyle, since it may push you towards financial problems.
- 5). Determine which areas you are willing to cut back on in order to own a home. Practice doing that for a few months before you purchase the home and put the extra money into your savings account to use towards your down payment and closing costs.
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