Saving for a house - how to do it right!
When it comes to achievements in life, buying a house is up there in the top ten things that people want to achieve before they die. The problem is that saving up enough money to buy a home can feel completely impossible. The good news is that with a solid savings plan, anyone can have a downpayment that’s enough to ensure that their home dreams are achievable.
You need a decent list of instructions about how to get it right when it comes to saving properly for your home. Whether you are hoping to buy a studio apartment as a starter home or you have the big guns blazing for luxury real estate, you need to consider how you can save for a house. With that in mind, here are a few things you need to do to get it right.
- Work out how much you need for the deposit.
So many homebuying wannabes think that they need 20% for a house downpayment, and it’s this that often puts them off checking to see whether they need less or not. Some potential homebuyers forget to check if they can qualify for as little as 3% down. You may have to pay insurance on a deposit of less than 20%, but it’s worth the cost if you can save upfront on the down payment.
- Build a budget that makes sense
If you want to save for a home of your own, you need to know where your money is going every month. You have to then work out what you can afford to build up your down payment. Sit down with the bank statements and mark your incoming and outgoing amounts. You can then work out where you can cut back and afford that luxury real estate deposit that you need.
- Think about downsizing
Everyone wants the mansion, right? Well, if you want to keep aiming for that mansion, you need to downsize and reduce your expenses so that you can save up for the deposit and costs. Living within your means is enough for most lenders but if you live less, you can then save more. Moving into a smaller place for a while so that you can put away as much money as possible is important for your savings pot to grow.
- Cut out some bad habits
If you smoke, stop and save the cash. If you love coffee, reduce how many you buy each week and make your own for a flask to take to work with you. If you’re an impulse shopper, cut your credit cards up and stop buying on them! You can consider cutting down on your purchases and save money.
- Work on asking for a raise
Speak to your boss about your current salary. If you have been working your butt off, the chances are that you are destined for a salary bump. If you are struggling on your current salary, then the best thing that you can do is ask for a raise and get paid a little more. Time the conversation right and you will be set up for success. It’s a good idea to do this after you have won on a huge project and you are gaining some kudos! Be confident in this conversation so that you can feel like a winner with it.
- Seek better work
If a raise isn’t an option, it might be worth going out for a job that offers more money. This can help you to save better for your down payment and you can even do better with your skill development. You might not be in love with your job, and that’s okay! Moving onto bigger and better things is a better idea anyway.
- Skip the vacation this year
Everyone loves to land a few thousand on a great vacation, and you should, too. Instead of doing that this year, put the money into your savings pot. You can really add some cash to the bank when you don’t go away for a change, and you can still have a fun time when you stay locally. You can explore sites near you or choose to go camping, plan at-home spa days, and more!
- Rent out a room
If you have space – even in a garage – rent it out! You can earn so much cash every month by sharing your space and having others come in and pay you for it. It’s a luxury for most, but if you have the room, you can add money to your account just by letting out the room. You can really take the pressure off your savings goals.
- Pay off your debt
If you have debts it’s time to chop them down. The less you owe, the more the bank will be happy to lend you for your dream home. Lenders always look at your debt levels before they will lend you any money, and you want to be a more favorable candidate, right? You don’t want to pay any more in interest if you don’t have to, and you should take some time to reduce your debt before you apply for a mortgage.
- Ask for help.
If you’re saving, when it comes to your birthday and holidays, ask for money in lieu of gifts. By having people offer to help, you can ensure that you skip the physical gifts and build upon your savings instead. There is no shame in asking for help; sure, people will say no from time to time, but asking gets you somewhere.
When it comes to it, you need a good money plan in place if you want to save for a home of your own. Many people believe they need huge swathes of money to get the home of their dreams – and you don’t have to have that! Saving up also doesn’t have to be a huge hardship – you just have to be ready to make some sacrifices along the way. It’s so worth it for the asset in the end!