Many of us consider owning a home to be the most significant accomplishment we can make in our lifetime. It is a dream come true for many of us who have realised this goal, but for some, it remains an elusive dream. Nothing seem impossible if you plan, save, and work hard for it.
People who achieved their first goal, follow this process and they – rinse and repeat, to help them pay off debts, save for retirement, reach financial independence, or travel the world. It will all depend on how determined you are to reach your financial goals.
There are a lot of ways you can save up for your dream home, here we have put together a short list featuring the best ways you can save for your first home sooner than you think.
Set your budget and create a downpayment fund
Financial experts recommend spending approximately 25% – 30% percent of your income on a mortgage. Sit down and calculate how much you are able to spend on a mortgage payment every month. You have to create a budget and set your downpayment goals. This includes figuring out exactly how much of a house you can afford.
Track your spending
After you have planned down and set your budget, you have to begin tracking your spending every single month. It can take some time to get used to, but the moment you see where all your money goes to, you will be amazed at how many opportunities you will find for cutting back, saving more money, and building that downpayment fund.
Craft a savings goal
As you plan how you can save for your home, there are two essential factors to consider; first is the costs upfront, second and last is the continuing costs. Your initial savings must be able to cover any upfront costs. It can consist of the downpayment, equities, home inspection, and more. Here are some basics to consider:
• 20% Downpayment
• $350.00-$500.00 Home inspection
• $300.00-$400.00 Home appraisal
• 2%-5% Closing Costs of the overall house budget
Have a definite timeline
Timelines allow you to have a specific target date when you are all set to buy that dream home. This is your biggest motivator for saving up. Monitor your income and expenditures and assess how much of it you can set aside each month. Do the math and divide the amount by your savings target for your housing costs, and you have the total number of months from today towards home ownership.
Share your financial goals
Many of us choose to keep our financial issues and plans to ourselves; however, it is good to share your home financial savings goal to people who matters to you like your significant other, friends, or family, here’s why –
• People who love you might want to help. You can ask them for small financial contributions for your downpayment during birthdays or special occasions instead of getting material things as gifts.
• Accountability offers added push to get going. When a parent or loved one asks how your house savings are going, you are more likely driven to keep going and get it done.
Lastly, be realistic about what you can and what you can’t afford. You will start picking out paint colours and furniture sooner than you can imagine; all you have to do is have the right savings plan and stick to it until you make it happen!
