You have decided it's time to move – for one reason or another, your current housing situation no longer serves your needs. Now you face
big decisions: Do I continue to rent or take
plunge into homeownership? Is it time to give up my private home and return to renting? Which makes
best sense for me financially?If you have never owned your own home, homeownership should definitely be your goal, either short-term or long-term. The American Dream aside, investment in real estate makes sense for everyone at some point. That involves building and following a financial road map. The question is, where are you right now on your financial road map? To answer that question, you simply must analyze your financial situation. Take stock accurately and objectively - assessing both your monthly income and your monthly expenses. It is a simple three-step process.
Step One: Establish Your Monthy Income After Taxes
Start by listing all of your monthly income. Be sure to list salary or wages/tips, savings and investments, alimony and child support, social security or pensions,and any other source of income.
Next list your estimated taxes broken down into a monthly amount. Don't forget to include federal, state, and local taxes.
Okay. Now subtract your monthly taxes from your monthly income. The result is your net income after taxes.
Step Two: Establish Your Monthly Expenses
This step is a little trickier since you will be entering expenses in three categories: * Current Expenses * Expenses if I Rent * Expenses if I Buy