Imagine yourself on a cozy couch, watching TV, going from room to room, and just enjoying all there is about freedom. It’s all because it’s your own home. Wouldn’t that be amazing? Everyone talks about wanting to own a car, home, or business, but only some succeed. A few who don’t manage to get their dream acquisitions may not lack the resources but the willpower to work hard and save for it.
If you’re one of those in their late 20s and early 30s, the pressure is real. Having your own home is the first step you can get closer to stability, settling down, and being the most independent person you’ve never known.
Buying a home can be very expensive, but it’s possible, especially if you have the upper hand on your finances—higher income, disposable income, liquid assets, credit scores, and low debt to income ratio. These are just a few of the factors that can significantly help you get the best mortgage rates so that you can have other financial resources aside from your savings. But take note that even if you nail all these, everything will still boil down to how much of a saver you are.
Saving for the Win
Saving can be very hard, but you can’t get anywhere if you don’t have the mindset of a saver. With the right mindset, you can achieve anything you set your heart into. Take it step by step, such as the following:
Determine your budget
How much can you afford? Can your budget stretch for a possibly costly single-family home, or can it only get you a tiny house? Your bank may suggest an amount that you can hardly afford than what you really can. Calculate everything first, including property taxes, mortgage, and home insurance.
From here, you decide how much you will give as your down payment. Knowing your budget gives you an idea of how much more effort you need to put. If you’re still many steps farther from the cost of your dream home, this means more weeks or months of hard and smart work.
Reduce your expenses
No matter how high your income is, if you don’t learn how to manage your disposable income properly—the money left after you buy necessities and pay your bills—you’re still on the losing side. The best you can do is to reduce your expenses, like cutting your utilities, use of energy, luxury spending, and impulsive buying habits.
For instance, you can cut off fifty dollars from your usual grocery costs per month. Then that gives you six hundred dollars for a year. Also, even when you get a raise, remember not to increase your spending. It’s one thing to celebrate your success and another when you upgrade to an expensive lifestyle.
Don’t treat saving as an option
Most people tend to put their savings allotment later, and so, in the end, find out they’re left with nothing. When you really want to be serious about saving, you don’t treat it as an option. You set a budget for it every month and put it away religiously. Soon, you’ll get used to it.
To avoid the temptation of taking from your savings account, separate it from the one you use for checking. And to buy your own home, you might as well treat your savings like those other inevitable bills.
Set aside money as if you’re already paying mortgage
In addition to treating your saving like bills, set aside money as if you’re paying your mortgage price for the future. Do this for at least a year before you make the real purchase. Assume your payment and pay it like a monthly bill.
Pay all the other debts first
So much can get to your savings if you pay off your debts, though it might sound counterproductive. Having debts such as student or car loans can drown your savings as most of your money will go to them. If you pay off before saving for your home, you’d be surprised at how much hundreds or thousands of dollars you can set aside.
Remember Why You’re Saving in the First Place
When you feel overwhelmed and want to give up in the saving process, remember why you even started. There are so many things in life that we can only get if we work hard. And buying your own home is one of them. If you can, find ways to double your income, be more financially educated, and, of course, reward yourself a little sometimes.