The first step if you want to solve your debt problems is to know your income and expenses. You must know how and where your money is spent. Knowing your spending is as important as knowing how much money is coming in.

You may someday be the next person who buys the world’s most expensive cup of coffee and bagel if you don’t know where your cash flow stands!

If you said five dollars for a cup of coffee at Starbucks or Dunkin’ Donuts is rather expensive, none would argue with you. Yeah no one but Jake Drehar might.

Jake looked forward to each day was a hot cup of coffee in the morning, the one thing he can’t miss in even in summer heat. Jake started it off with his coffee everyday and it would not be a good day otherwise. Jake walked to the counter at his favorite coffee shop on one Monday near the end of the month. He had known about writing a few checks that month and the balance in his checking account may be running low. He paid with his debit card as he expected his paycheck would be directly deposited into his checking account that day and he had some cash in his wallet. He’d pay cash if the debit card were declined.

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If this is your first time buying a home, it can be an anxiety-inducing, confusing journey. But knowledge is power, and with this article, it is my goal that you will become familiar with the elementary rules of home financing. Armed with this new education, and knowing what to do and not to do, will make this journey less rocky for you.

First Things First – Your Personal Finances:

Are you ready to buy? This question will invoke excitement in you, for sure, but there is time for excitement later. Qualifying for, and then getting approved for a mortgage loan is serious business, especially in light of this chaotic economy we are in. Being prepared for this, will inevitably allow you to qualify for more loan programs, with competitive and lower mortgage rates.

You must first answer these questions before you embark on securing a mortgage loan or house hunting.

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Yawn. This is what you might think when we start discussing budgeting, but do not be mistaken, ensuring that you manage your finances effectively can make the difference between completing your degree or diploma with the rest of your friends and dropping out of university on your own because you couldn’t afford to feed yourself.

Some students are more fortunate than others and will be receiving financial help from family or funds. Others will be borrowing the largest sums of money that they have ever borrowed so far in their lives (and just wait until you get a mortgage!), accruing debts that will last for years after graduation. It took me almost 8 years to finish repaying my Student Loan! Whilst the repayment of any long term, low interest loans such as Student Loans may be at the deepest depths of your mind right now, you’d be doing yourself a favour by reminding yourself when you’re trying to decide between the Gucci sunglasses or the Prada bag.

Do you know how much money you have as income each month? Do you know exactly how much you spend on the essentials like food and accommodation? Let’s face it, most people reading this will not have a detailed breakdown of their incomings and outgoings. Even if you have a budget set out, do you stick to it?

Okay. Let’s presume that you’re leaving home and are university bound, ready to take on the world. Now let’s discuss how to make sure your finances don’t prevent you from staying there!

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