So, you are looking to purchase a new (and your first!) home for yourself, and you have absolutely no idea where to start when it comes to saving for this huge milestone. While saving for a home may feel like a huge undertaking that you may feel is not possible, remember that it is totally doable and simply takes time! Once you begin your journey of saving for your first home, nothing will be able to stop you from achieving your goal.
Check out some steps that you should consider when beginning to save for a new home. Before you know it, you will be house hunting and on your way to becoming a homeowner!
Know your financial goals.
First, figure out what your goals are in terms of how much money you are looking to save for the home depending on the area that you are interested in purchasing in, as well as when you will need to save this money by. In terms of deadlines, assess whether this move is something that has to take place in the next couple of months, or if this is something that is a year or more out. The more time you have to save, the better, however life happens and sometimes things move quicker than we anticipate! When it comes to saving your money, you will need to consider saving for any moving expenses that will come along after purchasing your home, a down payment, and any closing costs and fees that you will need to pay once the mortgage is finalized.
Save any extra income or bonuses.
If you have any extra income coming in such as money from filing your taxes, any bonuses or raises, or any money coming in from a side hustle that you have, put that money aside immediately upon receiving it so that it goes directly into the home savings account. By saving this extra income before you have the opportunity to spend it on anything, whether it be groceries or any general bills, you will get yourself even closer to your final goal! If you do not have a side hustle and have some extra time on your hands, consider picking up a job on the side to help speed up the process.
Maximize your savings.
The best way to maximize your savings account is to keep your money in a high-yield account that will help you with a higher interest rate, ultimately growing your account as the money is sitting in it, which differentiates from a traditional savings account. In addition, set up some automatic transfers from your checking account into your savings account so that you are depositing money weekly or monthly without even thinking twice about it!
Budget, budget, budget.
While you are saving for a new home, be very aware of what you are spending each and every day and think about how you can cut costs. For example, any streaming services or monthly subscriptions that you have should be looked at to determine what you should keep and what you might be able to cut out for the time being. And yes, that means cooking at home more and ordering Uber Eats less!
Keep track of your progress.
Make sure that you are keeping track of your progress on a regular basis so that you are fully aware of how much more you need to save ahead of your deadline that you have created for yourself. It is important for you to check your progress and overall savings at least once a month and celebrate every single little milestone for yourself!