Saving for a home can feel like an impossible task, especially if you’ve never done it before. It’s true that a house will likely be the largest purchase you make in your life – but saving for buying a house is actually easier than most people think.
All it takes is some mindfulness and a bit of strategy to start effectively saving for your first home. With these tips and tricks, you’ll have enough for your down payment before you know it!
Here, we’ll share some of our best advice for saving for a home, whether it’s your first home or you’ve purchased a home before.
When you’re saving for a home, it’s important to have a place where you can actively set aside money that you intend to put towards the down payment. A savings account is the perfect place for you to do so.
This account should be separate from your other accounts, and the money you put in it should be completely dedicated to expenses associated with purchasing your home. Try to avoid withdrawing money from this account and focus instead on depositing as much as you can. You may be surprised to see how quickly the account will grow!
When depositing money into your savings account, keep in mind that all money must be sourced. As a result, put any cash you have lying around the house in the account as soon as possible and plan to make any large deposits at least two months before you plan to make an offer on a home.
If you’re actively trying to save for a home, it’s in your best interest to put together a monthly budget that you can realistically stick to – and then stick to it. Calculate how much rent, utilities, groceries and other routine expenses cost you and try to map out how much you can realistically be saving each month.
Having a monthly budget can help you to avoid extraneous expenses, leaving you more money to set aside for your home purchase.
If you’re the kind of person who embraces the ‘set it and forget it’ mentality, then you’re going to love this tip.
If you have your paycheck direct deposited into your account every week, set some of that deposit to go directly into your home savings account. You’ll be contributing to your savings on a regular basis, and you won’t even have to think about doing it. Even $50 per paycheck can make a big difference when it comes to saving for a home.
When saving for a house, eliminating large expenses wherever possible can be an impactful way to increase your savings. Instead of spending money on things like vacations, event tickets, or big ticket items like a new car or new electronics, set aside the money you would have spent on those things for your home purchase instead.
By eliminating large expenses and dedicating those funds to saving for a home, you’ll see a faster uptick in your savings and will be saving more efficiently.
Tax refunds? Birthday money? Garage sale income? Bonus money from work? Put it in your home savings account!
Unexpected income is a great resource when it comes to saving for a home because it’s money that you were not depending on in the first place. Saving unexpected income in any amount is a great way to bolster your home savings account without taking away from the resources you rely on to meet your basic needs.
Increasing your income is another great way to build a home savings account. Whether you take on extra hours at work, work some overtime, or take on an additional part time job, supplementing your income can help you have more expendable income on hand that you can contribute towards your home savings account.
Thinking about using self employment to supplement your income? Keep in mind that you may run into business expense issues and the money you make may not qualify as income. You’ll have to list your self employment as additional work and you will need paperwork to document it.
Have an extra room in your apartment you could rent out? Are your parents willing to let you move back home to live rent-free for a while? Know people you could carpool with to save on gas money?
While these options may not seem terribly appealing to some, they are great opportunities to save money while you’re saving for a home purchase. These temporary solutions can help you contribute extra money to your house fund on a regular basis.
Keep these suggestions in mind and you’ll be surprised how quickly your house fund grows! Having a strategy in place and a goal in mind will help you on your way.
Wondering where to turn once you’ve saved enough for a home – or how to know if you’ve saved enough? Turn to the mortgage experts at Maple Tree Funding! Our team is dedicated to finding the mortgage that’s right for you and helping you achieve your dream of owning a home.
With a variety of mortgage and loan options available and exclusive access to competitive programs from a variety of lenders, we can help you find the mortgage that suits you best. We’ll guide you every step of the way, from the pre-approval process all the way through the closing.
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