Who does not want to own a home, right? May it be an Upper East Side apartment, a contemporary penthouse in the city, or a beautiful cottage in the woods. Regardless of what type of house you have on your vision board, understand that this purchase can potentially be the most expensive and important one you’ll ever make. That only means you need to actively work towards it and have the money to get your dream home.
Whether you’re planning to get a mortgage or primarily pay for the down payment with your own savings, it’s essential to take a few crucial steps to prepare your finances fully. In today’s blog, we’ll give you a few tricks that you can do to save for your dream house.
Find the right budgeting system
Budgeting is one of the most talked-about topics when it comes to managing finances. But it’s also the most difficult one to figure out and stick to. Creating a budget starts with knowing your income and expenses every month. And if you want to save enough money consistently, you need to find the best method for you to follow.
You can look into several budgeting methods: zero-based budgeting, the envelope system, the snowball budget, reverse budgeting, or the well-loved 50-30-20 rule. Finding the best budgeting system for you will enable you to save more money and help keep your debts at a manageable level and pay for living expenses.
Look into other priorities
Another way to best account for how it’ll take you to get your dream house is to check your other priorities. The better you understand your financial situation, the smarter you’ll be in saving money. On top of your monthly expenses or down payment for your dream house, you also need to check your progress in other savings targets.
For instance, you need to put your emergency fund in place to avoid using your housing savings for a sudden car repair or a medical expense. It’s also crucial to start planning for retirement. You can seek the help of professional financial advisors who are knowledgeable about options like the Lockheed Martin pension plan. That house will be useless anyway if you don’t have the funds to sustain your future living expenses. Other things to consider include paying for credit card debts or student loans and opening savings accounts for other needs.
Think about downsizing
If you are eager to save money faster, downsizing is an effective method to try. This process involves living below your means by reducing your expenses, even the necessary ones, and put that money into your savings. This can be easy if you’re only budgeting for yourself and more difficult to implement if you plan for an entire family.
One major step in downsizing is moving to a smaller home or apartment. Let’s say you’re paying a $1,600 mortgage for a 2,500 square foot living space, but you’re utilizing about 1,000 square feet just for storage and extra rooms. Think about how much you can save on the mortgage alone if you downsize to a smaller house.
Furthermore, letting go of your big house can also help you save on utilities since a smaller space won’t require that much energy. Plus, you also get to help the environment by consuming less energy. You’re practically hitting two birds with one stone.
Check specific housing discounts
Checking if you qualify for housing discount programs can help you save tons of money too. If you’re thinking of getting a house in a rural location, it’s advisable to check the loan programs provided by the U.S. Department of Agriculture. If you meet their special or income requirements, you can potentially benefit from 100% financing.
There are also special housing programs for military service veterans or members, where one can low closing costs and without mortgage insurance or down payment necessary. For police officers, teachers, and emergency healthcare personnel, some programs can offer up to 50% off for the purchase price of the house. Create your game plan, understand the guidelines, and you will certainly be able to get save money and get that dream house of yours faster.
Having an unrealistic approach and bad money habits can turn the purchase of your dream house into a total financial nightmare. Get into the habit of managing your finances the right way, and you can one day get that dream home of yours. On top of all that, remember to be patient and take your time. Rushing yourself to buy a house can lead to a bad purchase, so better to go slowly but surely.
