What to Do When Your Mortgage is Making You Strapped for Cash

Buying your first home is an exciting experience! When I purchased my first place at 25 years old, the feeling of owning something that was mine gave me a lot of pride. Then the reality of the situation set in as I was forced to pay my first mortgage payment, which included real estate taxes, homeowner's insurance, and other fees. 

 

For the first few years of owning a home, I felt strapped for cash and unable to prioritize any other financial goals. Feeling cash poor when you first purchase a home is a normal feeling for most home-buyers. Thankfully though, there are some things you can do to alleviate the pressure of being strapped for cash.

 

 

Being house poor basically means that the largest portion of your income is spent on a mortgage and other housing-related costs, like property taxes, insurance, and maintenance.

 

Of course, it’s really important to get a good interest rate when applying for a mortgage. The lower your mortgage rate is, the less it will eat into your housing budget and the more money you’ll have for other expenses. Most financial experts suggest you spend no more than 25-30% of your take-home pay on housing costs. 

 

If your monthly budget reflects a higher percentage for mortgage payments, here are a few things you can do to offset the costs and stop being strapped for cash.  

 

 

One of the biggest contributors to being house poor is the additional repairs, maintenance, and upkeep that’s required to keep a home functioning and in good shape. As a first-time homebuyer myself, I wasn’t prepared for the added monthly expenses for lawn care, painting, cleaning, and other home repairs.

 

If you’re unable to do all the upkeep personally, turn to your friends and family and ask for their help. They will more than likely offer up a few hours a month to help you learn how to take care of your home. And if asking for a handout isn’t your thing, see what skills and services you can trade in exchange for the house work you need.  

 

 

Airbnb recently did a study that showed you can increase your annual income by $7,530 simply by being a host and renting out a spare bedroom in your home. One of the reasons a mortgage can cause you to feel strapped for cash is because the home is likely larger than your previous residence. 

 

This makes it a great opportunity to rent out any extra space that you have, from a spare bedroom to an entire section of your house. Offset the cost of your new mortgage costs by offering your place up for short-term rentals via sites like Airbnb.

 

 

After trying to engage friends and family to help manage your home, and bringing in more money to offset costs, it may be time to take a hard look at your housing situation. If you’re still unable to balance your budget, you may have to consider selling your home and downgrading to a more sustainable lifestyle. Or else you can choose to continue living in your home but know that you’ll have to make sacrifices in other areas of your budget to compensate for the higher living costs.

 

It’s not always easy being a homeowner, and sometimes you’ll have to make sacrifices to make it your own. But no matter which route you choose, being a homeowner is often a very rewarding and comforting experience. 

 

Just be sure to balance the overall costs with your budget so it makes the most sense for you.

Image Courtesy of Adobe Stock