Getting your first home is a wonderful new step in your life that can be highly rewarding and intimidating at the same time. If you find that you’ve been looking at housing prices with dismay, let us be the first to tell you that it is not impossible for you to get what you want. With these 5 strategies and a little patience, you’ll be able to save up for your first home.
Saving for something important — like a home — is all about priorities. If you go out to dinner often, take expensive vacations, buy the latest gadgets, and drive brand new cars that’s totally fine! However, if you’re looking to save money, you have to seriously look at your lifestyle and think about what is more important to you. If saving for a home is one of your top priorities, you should take the time to identify other areas where you can cut back in order to put more money in your savings. Create a budget to see where your expenses are going and move forward from there.
Pay Down Debts
Now, it may sound counterintuitive to pay down debts in order to save, but once those debts are paid off you could have hundreds, if not thousands, of dollars freed up to help you save faster! Other debts, such as a car loan, student loans, or credit cards could easily limit the amount of money you can put toward a mortgage. If you pay down these obligations, you’ll find that you not only alleviate a lot of financial pressure but also secure better mortgage rates!
Pay Your Future Mortgage
This is one of our favourite little tips that can have a big effect on your savings! Try to live as if you’re already paying that new mortgage as soon as possible. This means that in addition to your rent, you will want to put the difference between your current rental fee and your assumed future mortgage payment into a savings account and treat it as you would any other monthly bill. This habit will get you used to the idea of paying a bigger mortgage and, as a bonus, you’ll also be saving toward your house!
Another great tip for when you’re trying to figure out how and where to save money is to start by reducing your expenses by 10% across the board. For example, let’s say you’re spending $500 on groceries every month. Simply reducing it to $450 a month, saving $50, won’t seem like a huge difference but the money will add up when you apply this technique to all your expenses. You’ll find that soon enough you’ll have enough money saved for that down payment; just remember to give yourself time to save — it’s a marathon, not a sprint.
Pay Yourself First
Many people will wait until the end of the month to see how much money they have left over before putting anything into a savings account. However, this is a really bad habit to get into if you’re really trying to save because you’ll find that you rarely have any money left over. Take some time to calculate how much you can put into savings at the beginning of the month and do it then. It can take some getting used to, but once you start putting the money away, you will adapt to it. As a quick tip, keep your savings account in a different bank from your checking account in order to diffuse any temptation to dip into it.
Of course, the most important part of saving is patience! Remember that this is a big investment and that it takes time to accrue that amount of money. However, if you follow through with these strategies, you’ll find that saving up becomes much more efficient and you’ll be saving much more than anticipated. For more tips and tricks like these be sure to follow Falconcrest Homes’ blog series.Tags: Home buying process, Home buying tips, Save Up For Your First Home, Savvy Buyer