Reassemble Your Finances

Most homebuyers can find unlimited furniture, appliances, and remodeling projects. Because of these spending temptations, more than a few homebuyers end up not saving any of their hard-earned incomes. Some new homeowners even end up building credit card consumer debt because their spending outstrips their income.

Feeling a squeeze in the budget when you buy a home is perfectly normal. After all, your housing expenses are probably higher than they were when you were renting. But that's all the more reason that you need to take a lean-and-mean approach to the rest of your budget and spending.

Consider electronic mortgage payments

Mortgage lenders want to be paid and to be paid on time. And you should want to pay them on time. Late payments can cost you dearly -- many mortgages have stipulations for penalties equal to 5 percent of the amount of the mortgage payment if your payment is late. If your payment is one whole month late, a 5 percent penalty works out to an annualized interest rate in excess of 60 percent! Even being one day late can trigger this penalty. Late charges also show up on your credit report.

Sign up for your mortgage lender's automatic-payment service to have your mortgage payment sent electronically from your checking account to the lender on the same day each month.

Rebuild your emergency reserve

Most people clean out their emergency reserve in order to scrape together enough cash to close on their home purchase. Ideally, you should have ready and available an emergency cash reserve equal to at least three months' worth of living expenses. If your employment is unstable and you lack family to lean on financially in a pinch, aim for six months' worth of living expenses. Keep the emergency money in a high-yielding money-market mutual fund.

As with saving money to accomplish other important financial goals, rebuilding your emergency reserve requires you to go on a financial diet and spend less than you earn. Easier said than done, especially with all the tempting things to spend money on for your home.