For many of us, owning a home is part of the American dream. Whether you’re doing it for the first time or if you need a bigger house for your growing family, buying a home may be one of the most important financial decisions you may make. If you’re hoping to be a homeowner in the future, here are 7 useful tips for what you can do to save for a house.
- Penny Pinch Yourself: Look at your expenses and what you’re spending money on, and then find opportunities to cut back where you can. For example, try cooking meals for yourself and your family whenever you can. It’s a more affordable alternative to ordering from restaurants. Also, do your own grocery shopping instead of paying fees/tips to get your groceries delivered, assuming you can do it safely, of course. Make your coffee at home instead of buying a fancy latte every day.
When it comes to utilities, don’t be afraid to manage them more closely. Take your water usage, for example. That leaky faucet may be costing you, and just by taking shorter showers or watering your lawn less can make a difference with your water bill. A low-flush toilet uses significantly less water than a full-flush toilet. To reduce your electric bill, try adjusting your thermostat by only a few degrees (down in winter, up in summer) to help save money and energy. Other simple changes such as unplugging appliances not in use, turning off unnecessary lights and using natural light when possible can save some money.
Small expense reductions like these can really add up over time. Putting that money into a savings account will make it easier to save for a new home.
- Set up a Budget: Creating a budget is easier than it seems. To start, you should examine your monthly income and expenses. After cutting back on certain expenses, like the ones that are listed above, take note of any recurring expenses such as car payments, utilities, or student loans. Then, figure out how much money you spend each month on miscellaneous items, such as groceries. Once you have all your expenses figured out, compare it to your income and determine how much money you can put aside towards buying a home.
- Consider Taking a Side Job: Today’s virtual economy offers a variety of ways to earn extra cash that you can put into your savings account. Even if you can spare just a few hours a week, with the right qualifications, you can take on freelance opportunities as an appointment setter, graphic designer, social media specialist, video editor, writer, translator, proofreader, tutor, personal trainer, accountant, customer service representative, IT specialist, sales associate; the list goes on!
- Cut Back Your Retirement Fund: Consider decreasing your retirement contribution while you’re saving to buy a house. You shouldn’t completely stop adding to your account. Instead, decrease the amount of money that is going into that account each month and put the difference into your savings. This isn’t something that should be done long-term. Once you’ve obtained your savings goal, return the contribution percentage back to what it was previously.
- Ask for Money: When your friends and family ask what you would like for your birthday, holidays, or any other special occasions, ask for cash and save that money.
- Staycation for Relaxation: With most annual vacations postponed for the pandemic, you’re probably already aware of the low-cost activities to do with your friends and family—whether it’s going for a hike, visiting the park or going for a bike ride. However, with each plane ticket you didn’t have to buy or a meal that you didn’t have to pay for, you can add that money to your savings account.
- Save Any Tax Returns, Raises or Bonuses: Consider saving any tax returns, raises or bonuses that you may receive instead of spending that money. Pretend you never received it and live off your old paycheck amount and put the rest into your savings.
Whether you follow all or just a few of these savings tips, achieving your homeownership goal could happen sooner than you think.
Ready to buy a house? Give us a call. We’re here to help you every step of the way!