A lot of my readers and friends reached out with more questions from my previous blog of Steps to Buying A Home (https://loveahmongus.com/steps-to-buying-a-home/) so I am writing this to help people prepare financially for their home purchase.
It probably seems like a never ending list of things to check off before you purchase a home but I’m here to help with the financial aspect of it and hope that some of this information will be useful to you.

1. Check Your Finances
Isn’t this the most obvious? Sometimes not. Check your bank account, check your spending, can you afford another payment added onto everything that you already have going on? This is a good time to check your expenses and see if a home purchase is a good time for you. I’ve written a blog with an excel sheet that can help with your spending, for free! (https://loveahmongus.com/what-does-my-expense-sheet-look-like/)

2. How Much Should I Put Down?

My answer will always be 20% or more. Why? Because if you don’t, you’ll be paying $300-$500 more a month in PMI which stands for private mortgage insurance. This does absolutely nothing for you but goes towards insurance to the lender in case you default on your loan. On top of that, you’ll be paying this until you reach the 20%. Did you know that real estate investors always put 20% down on all their investment homes because they don’t like throwing money away so you shouldn’t either because your home is your investment.

3. 30 Year Mortgage Is Okay But 15 Is Better

My husband and I did our mortgage for a 30 year term because we were unsure what would happen in the next 15 years in case we lost our jobs and didn’t want to risk it. A year later, we refinanced for a 15 year term because we don’t know what’s going to happen in the next 15 years either and I actually left my job to become a Stay At Home Mom. Not only did we get a better interest rate but we will be debt free in 15 years instead of 30! Can’t really beat that!

4. Make Sure Everyone Is On The Same Page

This really should be #1 but I feel like when people are looking for a home, most spouses and family are already ready together. This just doesn’t apply financially but also mentally and physically. Make sure the home is a good fit for everyone and get their input when looking at homes together. You want a home for everyone and not just you. Sometimes everyone agrees and sometimes it’s a little more difficult but let everything be done within reason. A green or orange wall can always be painted over or a yellow fireplace can always be painted. The same goes for kitchens, bathrooms, and bedrooms. You also don’t want to overwork yourself or others to death feeling like you are flipping a home. Just some TLC to a home is expected but not flipping a house — unless that’s the purpose of your purchase.

With all that said, don’t let this discourage you from purchasing a home. Only you know when the right time is to purchase a home whether you have 1% or 20% down. These are just steps to encourage you to save money in the long run. I wish the best for you in your home purchase!

Sincerely,

Melissa Lee

A lot of times, your credit limit is at its limit so how can we increase the credit spending limit?

1. Use your card, a lot. 

If you aren’t using your card, why would the creditor increase your spending? Most cards come with a $250-$500 limit to ensure that you are responsible with a little amount. 

(Refer to my other blog about how to take advantage of your credit cards to maximize the best use for your usage.)

https://loveahmongus.com/taking-advantage-of-my-credit-cards/

2. You can ask for a credit increase every 6 months.

You are allowed to ask for a credit increase every 6 months, not that you should do so but be responsible. When you are spending a lot, the creditor usually increases your spending limits for you. If they do not, you can contact them to increase your limit. Be wary of how some creditors increase your limit. Some do not pull your credit, some do. My CapitalOne card, I am able to ask for an increase on my account without ever talking to anyone. My Chase card requires a hard credit pull, which is ridiculous so just know their practices and they usually tell you if they need to do a hard inquiry on your credit.

3. Most importantly, be responsible. 

More credit spending limit is good for your score but make sure that you don’t get too greedy because then it can be risky. More spending limits might mean more spending so be responsible. I usually do a credit increase every year as I do not need one every 6 months. It’s a bigger increase anyway when you do it every year as opposed to every 6 months. 

Hope this helps! 

Melissa Lee

A lot of my friends and readers have asked me, “What does your expense sheet look like, Melissa?” It is no secret and I am going to share that with you today.

If you have been following my blog, you will know that I put most of our spending and expenses on our credit cards to reap our rewards.

On my expense excel sheet, I put what the expense is and how I pay for it such as an example:

Mortgage (BOA): $1,000

Gym (CC): $25

I put what the expense is, what it’s paid with, and how much it is.

BOA stands for Bank of America.

CC stands for Credit Card.

This allows for me to keep track of what goes on my credit card and what goes through my bank account.

When something gets charged on my credit card, such as the gym, I will highlight it in yellow because it’s paid on my card but it has not been paid through my bank so technically, I still owe for that amount. Once I set up payment on my card to pay through my bank, I then mark it green because it is now fully paid. This is how I keep track of my expenses and always know where my money is.

I have provided a blank sheet of my expense sheet that I created for you all to use. This expense sheet has saved my friends hundreds, if not thousands of dollars because they get to see where all their spending goes. I hope the formulas populate over, if not, please reach out to me. They are very simple equations. You will change on the expense sheet what your bills are as well as spending. On the left side, it is my necessities and things that I pay the same amount every month. This side tells you approximately the amount that you will need to spend each month. These are your fixed amounts. On the right side is all other spending such as groceries, tithing, savings, etc. This will tell you how much you are spending extra compared to your budget. This number will hopefully let you see how much more you are spending. These are your flexible amounts because you may or may not be spending the same amount every month. If you ever get stuck or confused, please reach out to me in the contact form and I will be more than glad to help you. This takes a while to get used to so if you don’t get it on the first try, don’t be discouraged. This takes practice and once you get it, you’ll get it!

https://drive.google.com/file/d/1G_HOMMPWSMbM6YPqRajpaTyalJ_2UWnB/view?usp=sharing

Sincerely,

Melissa Lee

There is no right or wrong answer to this question. It’s based solely on who is more comfortable or better at handling the task. It’s not that everyone is fighting to be the accountant in their relationship but it certainly helps when they know what they’re doing.

Money and finances are the number one reason why married couples get divorced. It is so discouraging to read because that’s something that can be worked out together. My husband and I surprisingly never fought about finances. I think it may have been that we didn’t have a lot to start out with when we got married and we were grateful for what we had. I don’t know but I am thankful for it. What did we fight about? We fought about getting a dog. Result? We now have two beautiful fur babies!

If you are unsure about who should handle the finances, ask each other who is more responsible and more likely to keep track of expenses. It could become a chore if neither of you are up to it but it has to be done. One of you has to take control of the expenses or else it’ll be out of control. The person who is going to be handling the finances will need to do the following: check bank account every day to ensure every expense is accounted for and nothing is out of the ordinary, check all credit cards for payment due dates and to ensure charges are correct, make an expense sheet of every bill and their due date to ensure they get paid on time. These are just small things that will need to be checked for accuracy and to ensure that your cards aren’t being compromised for fraud. If you are not checking your bank account and credit card accounts, you are already making a big mistake. Both my husband and my card have been compromised at least 5 times so checking on it daily will make sure that no one else is using your credit card.

In our household, I am the one who handles all of our finances. We do not have separate checking accounts, they’re all shared. I have my expense sheet and I mark off expenses that have been paid and waiting to be paid. I take care of all the bills, budget, and money. My husband trusts me wholeheartedly with all of our finances to the point where he never checks the bank or credit cards. He does this on his own volition whether he is too lazy to check or just trusts me. There has to be trust or else this plan will not work. I am glad that he has never questioned where any of our finances are and just asks if our spending is within our budget. Anytime we purchase anything, we always ask each other for permission as a sign of respect, not control. We want to make sure everything lines up with our budget.

What I started doing was withdrawing the extra cash we had and used that to spend. I know that barely anyone uses cash to pay for things nowadays but for us, it’s a way of life. When the cash is gone, no more spending! That way, we don’t spend more than what we have. It’s so easy to swipe a card and that may be one of the reasons why they created a card. You lose track of your spending and that is how you overspend. I do leave some money in the cards in case we need to get things such as gas, higher priced items, etc. that do not accept cash. This may not work out for everyone so do what works best for you.

Sincerely,

Melissa Lee