Are you trying to save for your next home? Whether you’re already a homeowner or you’re currently renting, saving for a house is a big task. As property values keep increasing and we’re still stuck in a seller’s market, it’s taking buyers longer to save up. If you’re having a hard time finding ways to save money efficiently, the good news is there are some tips you can try to quicken your saving journey. Here are five tricks that can make big impacts on your savings and get you ready to buy your next home.
Limit your card use
Most of us have debit and credit cards, and they make it all too easy to spend money. Even after years and years of using these cards, spending money from them still feels less painful than handing over physical bills. That is, until we check our bank balance and credit card statements. The problem with cards is you can’t see your money disappearing at the time, but you’re still spending it. In order to save for your next home, try to reduce your card use. Take out cash and use that for your daily expenses instead, so you can see how much money you’re handing over. Take out enough to cover your weekly essentials, but don’t leave much room for non-essential spending. When you only have access to a certain amount of money at a time, it automatically limits your spending.
Use a savings account
When you’re saving up for a home, keep those savings in an account separate from your other accounts. You don’t want to lump your down payment savings with the rest of your money, or else you’ll lose track of how much you’ve saved and what you’re able to spend. A dedicated savings account for your home will act as a kind of vault. Don’t open it or spend any money from it unless it’s time to buy a home. Plus, you can automate your savings! You can set up your account so a predetermined chunk of money will go to your savings account each month. This way, you don’t have to remember to contribute to it, or worry about spending the money meant to go into savings.
Keep your credit score high
A good credit score can help you save for your next home. More specifically, it can help you save on your monthly mortgage payments once you buy a home. The higher your score is when you apply for a mortgage, the more likely you are to secure the best interest rates from a lender, who will see you as a responsible borrower. Lower interest rates will result in lower monthly mortgage payments, which will save you money and increase your cash flow. Mortgages are always pricey, but any savings you can get will be a big help in the long run.
Of course, budgeting is one of the best ways to save money. Using a budget helps you keep track of your income, expenses, spending, and everything else related to your finances, which can enable you to save for a home. If you know you’re actively trying to buy a house, your budget should include preparing for costs such as a down payment, closing costs, and mortgage payments. Think about how much you need to save each month to build up the amount you need to reach your goal. Back at the start of 2020, we reviewed some popular budgeting apps that might help you save money. You can target apps to your goals and income to create a realistic budget that can help you save!
Consider your employment
There might be some actions you can take to earn more money in your everyday life that will help you save for a home faster. Are you in a position where you can ask for a raise at work? Maybe you can explore other job opportunities with a higher salary or get a temporary part-time job to boost your cash flow. These aren’t always realistic options, and not everyone will be able to start making more money right now. However, if any of these solutions are available for you, consider exploring them!
It can take a long time to save for your next home, depending on where you’re starting, but don’t be discouraged! Keep your buying goals in mind and do your best to narrow down what you’re looking for in a house. This can help you determine your budget and timeline and put you on track to owning a home faster. Plus, you can enlist the help of a mortgage broker if you need some extra guidance! Brokers are ready to assist you with everything from your credit score to interest rates to paperwork.
If you need help buying a home or have questions about your mortgage, get in touch with me!