If your goal is to buy a home, it’s a good idea to begin planning to put away a set amount of money each month to save for your down payment, closing costs, inspections fees, etc. Setting a clear goal and creating a specific plan to work toward your goal each month will help you save enough to cover your home buying costs in no time! Take control of your finances and use these simple methods to work toward reaching your goal.
1. Track your expenses and spending
Knowing where your money goes is an important first step in saving for your home’s down payment. You can save receipts from all of your purchases each month and enter them into an excel spreadsheet or use an app or online tool to track your spending. Being able to see exactly where your hard earned money goes each month can be very eye opening!
2. Establish a budget
Now that you’re tracking your spending, use this information to cut back and keep those dollars in the bank. Sticking to a budget can be challenging, so work hard to stay focused on your goal! If your having trouble sticking to your budget you can try setting aside a small amount each month to spend on yourself. Treating yourself each month can seem like a tiny reward for managing your spending well throughout the month. Just remember, budgeting will definitely pay off once you get the keys to your new home!
3. Create a separate savings account
Another great way to ensure you aren’t spending the money you set aside each month in the event that you need to dip into your regular savings is by creating a separate account for your home buying expenses. Consider this account untouchable. The only time you should touch this account (aside from an emergency) is when you are ready to purchase a home!
4. Be a savvy consumer
Taking a closer look at your monthly bills and shopping around can be another great way to save money each month. Plus, you may be paying for services that you don’t really need (such as multiple movie or music streaming subscriptions). Shopping for deals and comparing rates for your service providers takes a little work but can really pay off in the long run.
5. Boost your income
Do you have any under-utilized talents? Have you considered turning your hobby into a profitable side business? Starting a side business is a creative way to boost your income. If a side business isn’t your cup of tea, you could try looking for opportunities to work extra hours or consider a part-time job on the weekends. Be sure to put this extra income directly into your home buying savings account each month!
We hope these tips are helpful and would love to help you along your home buying journey. Feel free to contact our team with questions or to see how much home you can afford by getting pre-qualified for free. Getting pre-qualified for a mortgage can help you better plan for how much you will need to save for buying a home. To submit an application online and receive a pre-qualification letter, click here to get started!
What methods have you used to help save for the down payment on your home? Let us know in the comments below!!
We LOVE being your lender!