10 Steps to Save for a House
The housing market has been climbing in a rebound sharply from a few years ago. The job market is improving, the stock market is thriving and interest rates are still pretty low. Many Americans are considering it might be time to buy a house. So is it time to get frugal?
The rules have changes and lending is more strict. You have to be prepared and have a solid amount of savings ready to begin your house hunting. Here are some ideas to save money.
- Do you know your monthly budget? Write it out and see where your money is going. Learn to spend less and save more. Be honest and realistic about your current spending habits and make it work. Print off a copy of your current expenses and decide where you can give, or actually give up to build that savings.
- You might downsize before you upsize. Sometimes you have to go backward to go forward. If you do not have kids, move into a one bedroom apartment and if you are leasing with kids, try and find somewhere you could move to save on living costs. Plan on being there a year or two while you save up.
- You must put money in savings FIRST every paycheck. Pay yourself first and put that money aside immediately before paying other bills.
- You could work more and take on a second job or do overtime at your first job. But always put your money straight into your savings. It is the large chunks that add up.
- Stay out of your Savings. When you are saving for a home, the savings account is off limits. It is not there for wiggle room, or borrowing from, and short of a major medical need, the money saved for the house needs to stay in tact. Make sure you do not run up your credit cards because it is not there to pay those off.
- Some think it is easy to let those pennies add up but it is not. You make the biggest impact by budgeting and cutting back on larger things you need to let go of. Skipping a vacation or wearing last year's clothes, will not hurt you. In the end it will boost your savings to get into that new home.
- Save everything that is gifted to you, or any windfalls that blow into your life! From birthday money to year end bonus at work... it should go into savings.
- If you are younger and not near retirement... save less for retirement while you are saving up that house down payment. You are simply saving for your future in a different way.
- If you think about it, you are putting your lifestyle on a diet. You need the support of friends and family as you do this. Do not be afraid to talk to them when you need some advice.
- Last of all, do not punish yourself. The idea is to make this a doable situation. You are setting yourself up to succeed. You may get frustrated and feel unsuccessful, so take comfort in doing something special to get through those times. Find ways to still enjoy life without spending money.