Your Spending

In preparing to buy a home, you should look at how you spend your money and how much you save. The first step you should take is to determine how much money you make using this chart. Be sure to include your spouse’s income, as well as second jobs, regular overtime, seasonal work, public assistance, child support and any other income.

Regular Monthly Income

Your income: If paid:
Weekly $ _______ x 52 ÷12 $ _________
Twice a month $ _______ x 2 $ _________
Biweekly $ _______ x 26 ÷12 $ _________
Your spouse’s income:  

If paid:

Weekly $ _______ x 52 ÷ 12 $ _________
Twice a month $ _______ x 2 $ _________
Biweekly $ _______ x 26 ÷12 $ _________
Other income: Second job $ _________
Regular overtime $ _________
Public assistance $ _________
Child support $ _________
Pension $ _________
Social Security $ _________
Other* $ _________
TOTAL MONTHLY INCOME (the amount you take home after taxes and other payroll deductions) $ _________

* Other can include seasonal work, unemployment compensation, VA benefits, military pay, alimony and bonuses.

Regular Monthly Expenses
Now, track your monthly expenses using this chart. How much do you spend on housing, food, utilities and credit card debt?


Housing $ ____________
Food $ ____________
Meals away from home $ ____________
Average utilities:


$ ____________


$ ____________


$ ____________


$ ____________
Cell phone $ ____________
Internet service $ ____________
Car payment #1 $ ____________
Car payment #2 $ ____________
Car maintenance/gas $ ____________
Commuting expense $ ____________
Credit card #1 $ ____________
Credit card #2 $ ____________
Credit card #3 $ ____________
Loan payments $ ____________
Loan payments $ ____________
Child care or child support $ ____________
Car insurance $ ____________
Other insurance $ ____________
Doctors/medical $ ____________
Clothes $ ____________
Lessons/tuition $ ____________
Other $ ____________
Other $ ____________

Once you have figured out your income and your expenses, use the chart below to find out how much you should have left. The money left over after expenses is called discretionary income. You may choose to save or spend your discretionary income.

Total monthly income $ ____________
Minus total regular monthly expenses – $ ____________
Discretionary income = $ ____________

After you complete this budget, you should have a better idea of how you spend your money. If you have more expenses than income, you have a deficit. You need to earn more money or reduce your expenses. Families who run at a deficit for two or more months usually begin relying too much on credit cards and end up with more debt. If you think you are in this situation, you should talk to a credit counselor. Click here to link to the credit section.

If you are like most people, you spend about 50 to 75 percent of your income on living expenses; 10 to 35 percent on installment debts; 9 percent on entertainment, gifts and nonessential spending; and 6 percent on savings.

The discretionary income shows you what you should have left over at the end of the month. Many people spend this money on entertainment, dining out, vacations and other nonessentials.

Completing this budget probably makes you wonder where your discretionary income goes. You can keep track of this by writing down every time you spend money and what you spend it on. This may help you cut back on nonessential spending. There are also ways you can cut your current expenses. Here are a few suggestions:

  • Clip coupons
  • Use a list to do grocery shopping
  • Compare costs of similar products
  • Get three different prices for big purchases
  • Take your lunch to work
  • Look in resale shops for used clothing, furniture, sporting equipment and toys
  • Trade services with friends instead of paying for them
  • Find fun, free activities and places in your area, such as concerts, parks and museums

If you have several debts or loans you need to pay off, try setting a goal to pay them off by a certain time. Set monthly goals that are attainable. Always check with a loan officer to see which ones you should pay off first. Some are of greater importance to your credit score.

Be sure to put money in a savings account each month. This money can be used for expenses such as a down payment and closing costs when you are ready to buy a home.

If you have more questions about setting and sticking to a budget, you should attend a budgeting or credit course offered by many agencies in the area for free or for a small fee. Click here to see the list of local agencies.

Now, the next question to ask is, “How is my credit history?”