When you are planning to buy your first home, managing your finances is among the most vital steps. To help you get the ball rolling, have a look at these four handy tips.

1 . Define Your Budget

To set your budget, you must determine how much mortgage you can afford. Typical mortgage payment guidelines advises that, ‘the total amount you pay on your mortgage shouldn’t exceed 28% of your gross (not net) income.’ You must make sure that the amount you spend on borrowing (total), doesn’t exceed 36% of your gross income. Investment suggests that ‘most aspiring householders can afford to finance properties that cost between two and two and a half times their gross annual income.’

When you apply for a mortgage, you will want to ensure that you can live comfortably. It is not wise to choose a monthly installment that will make it difficult for you to pay your other expenses.

2 . Try Finance Apps

When you are in the process of saving, what you need is a strict budget. There are several apps that can help you save money, including:

• Good Budget: The GoodBudget app helps you create categories for your budget and then allocates an amount for each different category. The amazing thing about this financial application is to help you plan your expenses, (not just monitor your expenses). This is particularly useful for couples because you can synchronize your two budgets.
• Pocket Guard: This finance app helps you link accounts, bills, savings and loans in one place. PocketGuard helps you create a budget that works for you based on your lifestyle, spending habits and how much you want to save.

3. Cut Your Spending

Simple but necessary, if you want to save plenty of money, you must cut your spending. There are many ways you can do this around the house, including:

• Green energy providers: Choosing a green energy provider can help you save money on your bills every month.
• Pre-plan your meals: Meal planning can help you make wiser spending choices, reduce waste, and eat healthier.
• Used goods: Shopping at thrift stores can help you save a lot on things around the house. To get started, try apps like Wallapop or Decluttr.

4. Reduce Your Debt

When you prepare to buy your first home, it is vital to reduce your debt as much as you can. Paying your debt first will speed up the process and increase your credit score. For some techniques to reduce your debt, try these options:

• Debt Snowball: With the debt snowball method, you start by paying off your smallest debt. Then, when the smallest debt is paid, you move on to the second smallest debt. The concept is that small debt is much easier to get rid of, and small successes help encourage you.
• Debt Avalanche: To master the debt avalanche method, you must make the minimum payment on each debt. Any extra funds you have should be paid towards the debt that has the highest interest rate. Once this is paid off, you move on to the second highest level of debt.

Are you attempting to find new condo or an older townhouse, these four tips will help you save for your first property.