The first step of saving for a home is taking control of your finances.
Buying a dream home may seem too far from reach when you are not putting aside enough money to turn it into a reality. If the thought of saving up enough money to buy a home scares you, you are not alone. Coming up with enough money for a down payment can be intimidating for future homeowners. Here are some great ways to crush that fear!
Keep track of your expenses and spending
Whether you are trying to buy a home or not, this is something you should be doing! There are dozens of apps and online tools that keep track of your spending, even breaking it down to categories. It is easier to track if you use a card for everything, otherwise it is easier to lose track of where your money is being spent. Before you can figure out how to keep more money in the bank, you need to find out where your money is going.
Create a budget and don't stray
After understanding your spending, you will find a few places you could cut back or eliminate costs. This may be easier said than done, but just keep focusing on your goal! Holding the keys to your new home will make you forget about the minor sacrifices you had to make along the way. If you feel that sticking to a strict budget will cause too much discouragement, go ahead and work in a few splurges into your budget.
Hunt for deals
You may be tracking your everyday spending, but make sure to track your recurring monthly expenses as well. It is likely that you are paying for services and subscriptions you don't really need. Give your service providers, credit card companies, and other businesses you pay monthly a call to discuss lower rates and better deals.
Save up for a down payment
When saving up for a home, you should keep that savings account untouched. Don't even consider spending any of those savings until you are ready to purchase a home. It is easier to save and keep money for a down payment if you set up a separate account. Visualize this fund as a one way street. Money should go in, but not come out!
Look for extra ways to boost your income
Your budget has two parts: Money coming in and money going out. To get the best results, you need to work on both parts. Check if there are opportunities to pick up some extra hours. If you are feeling committed, you can consider freelance income or a part-time job on the side.