Purchasing your own home has always been seen as one of the biggest financial milestones you can achieve in your life. But if you want to know how to save for your home, it will feel incredibly overwhelming. House prices have been rising, and the cost of living is through the roof. Most people are trying to make ends meet, let alone set aside enough money to pay. So, how do you do it? Here are some simple saving hacks that can help you achieve your goal of owning a home faster.
1. Automatically save for easy growth
Setting up automatic transfer to your home savings account ensures consistent progress towards your goal. Choose a dedicated high-yield savings account to maximize interest gains. Consider using an application that helps you manage your budget (see this comprehensive list). You should consider your savings as a non-negotiable bill – arrange a payday so you don’t spend it first. Additionally, if you receive bonuses, tax refunds, or cash gifts, deposit a portion directly into your family fund. Automating things can help remove some of the stress of savings.
2. Cut unnecessary expenses without feeling pinched
Make sure you can temporarily reduce or eliminate non-essential fees to release additional cash. Some ideas for pruning cost include:
- Eat at home instead of eating out
- Cancel unused subscription
- Downgrade advanced services
- Negotiate a lower billing rate
- No challenge
In terms of financial situation, the smallest adjustment can make a huge difference.
3. Take advantage of the first-time home buyer program
Have you done research on the programs available to first-time home buyers like you? There are grants, down payment assistance and low interest loans. For example, FHA loans may need to drop by 3.5%, making it easier for many people to own a home. If you are a veteran, a VA loan may also be a good choice. If you want to buy in a rural area, a USDA loan may be great. So, look around and study what might be available to you. There are a lot of resources out there to help you get started.
4. Increase your income and the hustle and bustle on the side
Gaining extra income from side-business can speed up your home savings without cutting your lifestyle. There are a lot of potential side shows out there, some of which take up almost no time. Here are more than 38 ways to pile money on the side. Even spending a few hours a week on a show can greatly speed up your savings progress.
5. Adopt the 50/30/20 budget rules
If you want to figure out how to save for your home, the 50/30/20 rule can help you distribute 20% of your income to your savings. 50% of people will use essentials (rentals, food, utilities, etc.). You will leave 30% of the extra spending, and you can actually save every other cent (part of which should be your family fund). Sticking to such budget rules will help you get on track to achieve your goal of owning a home.
6. Reduce debt to improve your mortgage potential
Paying off high interest debt can free up more money to pay your down payment. Prioritize repayment of credit cards, personal loans and car loans to improve your financial situation. A lower debt-to-income ratio can also allow you to get better mortgage rates and higher loan approval amounts. You should also avoid taking on new debt while saving for your home, as it may affect your credit score and borrowing rights.
Start saving smart now
If you want to know how to save your home in today’s world, there are some steps you can take to simplify the process. Even the smallest changes can help you achieve your goals faster. In your back pocket, after these six simple hacks, you will unconsciously unlock the front door of your new home.
Read more
Dave said: Don’t buy a house when you go bankrupt
Is it cheaper to rent a house?
