Buying a home is a big step and a huge financial commitment. It can be a bit overwhelming to know where to start when looking at your financial situation and wondering how you can get from no-ownership to homeownership. Try putting these strategies into play:
When’s the last time you took a good look at your finances? The first step for homeownership is to look at your budget and see where your money is flowing. Write down all your expenses; check how you’re saving. Consider areas where you can scale back on your expenses and consider automatic transfers to your savings account with each pay period. One of the most important things with budgeting is to be realistic. It is unreasonable to cut all entertainment money out of your budget for the next year. Even if you planned on being a hermit, there are always unexpected surprises that pop up. Maybe a friend is getting married or maybe you left your lunch at home and need to go out during your work day. Give yourself grace and be realistic with your budget.
Stick to the Budget
Crafting a solid budget does no good if you’re not able to be firm with adhering to it. This isn’t easy, it’ll take quite a lot of discipline, but it will be so worth it. When friends ask to go out to dinner, suggest cooking at home instead. Budgeting doesn’t mean you need to say “no” to extra opportunities all the time, but you will need to get creative about how to stretch your budget a bit further.
Two Words: Side Hustle
Have a hobby you enjoy? Have you ever considered how it might be able to bring in some extra cash? There are many ways to earn a little side hustle these days: dog walking, house sitting, being a health/fitness coach, etc. Explore some of these options and see what kind of extra cash you can pocket with these hobbies. Just make sure that extra cash is going straight to savings and not to that new tool/piece of clothing you’ve been eyeing!
Depending on your situation, consider if it would be fitting to move into a smaller home or apartment for a year. Not only would this lower your monthly rent payments which allow you to put more towards savings, but it would also force your to declutter your home. Moving into a smaller space will pose the questions “Do I really need this?” and “How did I end up with two of these?” Even better, take your excess belongings and hold a yard sale! Boom, there’s an extra few dollars into your savings account.
Do you have any other tips you recommend when saving for your next home? Let me know!