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How To Save For A House: 5 Tips On Saving For A Home
How to save for a house, with so many other financial responsibilities? Many Americans find themselves pondering this very question--they want to take advantage of low housing prices and rock bottom mortgage rates, but where to start? We've put together a list of simple, painless tips to save for the home of your dreams without having to live like a pauper.
Sure, it's a word many people don't like to hear, but it is essential if you want to buy a home any time soon. Track your spending for a month, whether it's writing down your every purchase daily in a notebook, or using one of the many online tools available. Once you have it all, review it. You'll likely be surprised at where some of your hard-earned money is frequently spent. Highlight unnecessary expenses, and those you can either eliminate or reduce. Then add the total, and you should have a nice little portion to contribute to your home savings. 2. Break down your goals. Separating your main goal--saving for a house--into several smaller goals allows you to tackle a more easily achievable task, such as saving enough to cover closing costs. Breaking your goal down in this way is akin to climbing a series of small hills, rather than an entire mountain. 3. Save unexpected windfalls. Any unexpected income, whether a larger than usual tax return, a gift, or even winnings from lottery tickets, can add a nice boost to an account you've set aside to save for a house. Instead of buying yourself the newest tech gadget or that pair of shoes you've had your eye on, set it aside for one of the best things you can buy--a home of your own. 4. Ask for help. Making your goal known not only motivates you to stick to it, it can inspire others to help you reach it. People may be pondering what gift to get you for the holidays or for your birthday. Let them know you'd appreciate contributions to your savings fund the most, and it can save them the stress of shopping for the perfect gift as well getting you a few steps closer to your goal. In fact, one couple was able to make the entire down payment on their home simply by asking for contributions to a savings account in lieu of gifts. 5. Pay off your debt. The interest you're paying on those credit cards could be money going into your savings account. Though it may seem like paying off large amounts of credit card debt may seem counterproductive at first--after all, that money could be put into your house fund--it's well worth it in the long run. Not only will you save money wasted on paying interest, you'll be able to get a larger home loan and a better rate if you have less debt. It may be painful to pay off that balance all at once, especially if it's large, but it's just one more step in the process of how to save for a house effectively, and eventually you'll be where you want to be: home. -By Katarina Combs |
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