Buying a home in 2026 might feel intimidating or out of reach, especially with market fluctuations and uncertainty. However, smart budgeting and thorough planning will help you navigate the process with confidence. Let’s break down some practical budgeting tips to help you achieve your home-buying goals this year.

Review Your 2025 Spending and Make Goals for 2026

Before you start planning your goals for 2026, take a look at your 2025 financial habits. This will help you determine how much to budget for your monthly expenses, and possibly identify areas where you can reduce them. In the new year, you want to make sure you’re setting realistic financial goals, and making space for home savings.

Calculate Your Comfort Zone

Just because you’re not ready to buy yet doesn’t mean you can’t start looking. In fact, poking around the market can be incredibly helpful to your budget plan. Getting a head start on your home search will give you an idea of how much homes in your area cost, what loans you’d qualify for, and—most importantly—how much you can comfortably afford.

While you explore the options on the market, consider your income, lifestyle, family needs, hobbies, and saving goals. Your mortgage should allow you to build long-term financial stability while still enjoying life. Don’t forget about comfort when you’re calculating a budget!

Practice a Monthly House Payment

One of the best budgeting techniques is to practice a monthly house payment. Once you have an idea of your price range, and what the monthly house expenses would be, start putting that amount into savings every month—and don’t touch it. Pretend you’re making a real payment.

This technique will guarantee you have money saved for your down payment, closing costs, and moving expenses, and it will also help you adjust to the future payments. You can get used to a monthly house payment before you really start paying it, and you can determine if your calculations are actually comfortable for you.

Improve Your Credit Profile

While you save for a home, make sure you’re also building a strong credit profile and giving yourself the best chance of approval. This year, comb through previous credit reports. Dispute any errors or discrepancies, consider talking to an advisor, and see what improvements you can make. As American Pacific Mortgage explains,

Another thing to avoid if you’re looking to build a strong credit profile is late payments on a credit card—or any other bills, for that matter.  There’s nothing you can do about mistakes in the past, but make sure you’re paying attention to this moving forward.

Try to avoid late payments going forward, but don’t dwell too much on things you can’t change. Just learn from them and turn your attention to the future.

Account for Other Expenses

Make sure you know all the expenses involved with buying a home. In addition to the mortgage and down payment, make sure you budget for closing costs, moving expenses, initial repairs or maintenance, insurance, property taxes, utilities, furniture and household essentials, etc. Don’t let this list scare you—just do your research and plan accordingly, so you can avoid unexpected surprises.

Bottom Line

Buying a home isn’t as daunting as it seems—all it takes is some thorough planning, and the new year is the perfect time to reevaluate your personal and financial goals. If you’re looking to start your journey to homeownership in or around Stillwater, MN this year, let’s connect. I can help you with the planning process and fill you in on what to expect.