It can be an incredibly intimidating task to save up for a new home but it can be done. If it wasn’t possible then I wouldn’t be in the business of helping people buy and sell houses. I found a great online resource that lays out a step by step plan to save up money for a good sized down payment for your very own home. If you follow these ten pieces of advice, then you will be well on your way to owning your own home.
- Create a monthly budget: Keep your spending under control and stick to the plan you create. Then you can put all the leftover money that usually spend recklessly in savings.
- Quarantine your savings: Open a separate bank account to put your savings house fund into. Sometimes if there is extra money in your account, you want to spend it just because it’s there but separating it out will help avoid that.
- Make saving automatic: Ask the payroll department to send a direct deposit to your new savings account so there is no way that money will get spent.
- Save 100% of any windfalls: If you receive any bonus or tax refund then send it straight to the savings account. Now is not the time to splurge.
- Save in big chunks: Cutting down daily expenses can be helpful but you will make a big difference if you cut major expenses like a vacation or a car.
- Downsize before you upsize: If you don’t have kids, maybe consider moving to a one bedroom apartment before making your house purchase. You could save 20-30% on rent and put all that extra money to the house fund.
- Work more: Get a second job or take advantage of overtime or additional work if it’s available.
- Save less for retirement: Remember that buying a house is an investment as well. You are still saving for your future but just in a different way.
- Ask for support: Tell your family and friends what you are doing and ask for their support. They can help you out by planning less expensive hangouts.
- Don’t punish yourself: Make sure to treat yourself occasionally so you don’t go crazy.
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