Making the transition from renter to homeowner can be a challenge for nearly everyone. One of the greatest challenges is saving enough for a down payment. In most cases this means making aggressive spending cuts or boosting your income flow. In either instance it is a hurdle that most first time homeowners will need assistance in overcoming.
Here are some helpful ways to keep on budget towards the goal of purchasing your new home.
- Know what you can afford to save. Take a look at your income and decide how much you can actually save a month. Whether it is 10% of your income, or $250 per month. It may be beneficial to meet with a financial planner that can assist with a savings plan or help with budget strategies for instance where to stash your cash.
- Take your savings out first thing; don’t just wait for the end of the month left overs.
- Sometimes small steps can lead to big savings, before you purchase anything ask yourself “do you need it, or do you just want it?” If it’s groceries you may need it, if it’s a new watch you might want to rethink your purchase.
- Download a budget app to help you track your expenses. Try Mint, PocketExpense, Thrive, or try your banking app.
- Open up a separate interest-earning savings account and name it New Home. This will help you keep focused on your goal as you can see how much progress you are making. If you’re contributing more to your 401(k) than the company will match, temporarily scale back your contribution to the company match for a couple of years and put that extra cash in your down payment fund.
- Know your market. It is always recommended to speak with a Real Estate agent who can give you perspective on the current market and what kind of home you see yourself living in, they can also recommend trusted lenders that will give you a full picture of your financial situation and help you determine just how much you need to save in the first place.
Feel free to contact The Shannon Rose Real Estate Team if you have any questions regarding your real estate needs.