As someone working in a skilled trade profession, making sure your mortgage payments are in order and on time can be a challenge. The nature of your work can sometimes make it difficult to predict your earning potential or manage your finances effectively, which can lead to missed payments or debt.
However, by implementing some effective strategies into your budgeting, you can ensure that your mortgage payments are covered every month, regardless of job fluctuations or financial obstacles. Here are five strategies to help you get started:
1. Create a realistic budget
The first step towards effective mortgage payment budgeting is to create a realistic budget. This means taking a hard look at your monthly income and expenses and determining what you can and cannot afford.
To create a comprehensive budget, start by separating your fixed expenses (such as your mortgage payment, car loan, and utilities) from your variable expenses (such as groceries, entertainment, and travel). Then, calculate your monthly income and subtract your fixed expenses from that figure. What’s left is your discretionary income, which will need to cover your variable expenses.
By setting a realistic budget and determining your discretionary income, you can ensure that you have a clear understanding of what you can afford each month and can plan your mortgage payments accordingly.
2. Use a mortgage calculator
Once you have a budget in place, you can use a mortgage calculator to get a better understanding of what your monthly mortgage payments will be. A mortgage calculator takes into account factors such as the amount of the loan, the interest rate, and the term of the loan to provide you with an accurate estimate of what your payments will be.
By using a mortgage calculator, you can determine whether your monthly payments are feasible with your budget and adjust the terms of your loan accordingly. For example, if you find that your monthly payments are too high, you may want to consider getting a longer-term loan with a lower interest rate.
3. Consider a biweekly payment plan
One effective strategy for managing your mortgage payments is to switch to a biweekly payment plan. Under a biweekly plan, you make half of your monthly mortgage payment every two weeks, which adds up to one extra payment per year. This can help you pay off your mortgage faster and save money on interest in the long run.
Furthermore, since most skilled trades professionals are paid on a weekly or biweekly basis, switching to a biweekly payment plan can make it easier to keep up with mortgage payments and avoid late fees.
4. Set up automatic payments
Another effective strategy for managing your mortgage payments is to set up automatic payments. By doing so, your mortgage payment will be automatically deducted from your bank account each month, which can help you avoid missed payments and late fees.
Furthermore, setting up automatic payments can help you manage your cash flow more effectively, as you won’t have to worry about remembering to make your mortgage payment each month.
5. Build an emergency fund
Finally, one of the most effective ways to ensure that you can cover your mortgage payments in the event of a financial emergency is to build an emergency fund. An emergency fund should contain at least three to six months’ worth of living expenses and should be accessible in case of job loss, illness, or other unexpected expenses.
By building an emergency fund, you can ensure that you have a safety net to fall back on in case of financial hardship, which can help you avoid missing mortgage payments or going into debt.
Bottom line
As a skilled trades professional, managing your finances and mortgage payments can be a challenge. However, by creating a realistic budget, using a mortgage calculator, switching to a biweekly payment plan, setting up automatic payments, and building an emergency fund, you can ensure that your mortgage payments are covered each month and avoid financial hardship.
> For one on one or group assistance with personal finance, STR recommends that you check out the following resources:
> Inaccuracies with Bureau of Labor Statistics (BLS) data: Many of our blog posts will quote BLS data. SkilledTradeRescue.com has been able to identify that data quoted specifically for Skilled Trades can be as much as 50% LOW in many USA labor markets. For more information on these inaccuracies please visit the STR national labor survey page at the link below. On this page there is a video containing the latest information at the top of the page as well as other information. If you currently work in skilled trades, PLEASE consider participating in our national labor survey.
