When you are interesting in buying a home in a hot seller’s market, it can be a bit of sticker shock when you see the combination of closing costs, down payment, and renovation costs all in one number. However, saving up over time can put you in a position to stress less and enjoy more of the home purchase process, according to top real estate agents. Here are five strategies that, in combination or on their own, can help you boost your savings for a house.
Evaluate Your Finances For Areas to Reroute Money to Savings
Once you’re financially stable, many people choose to save for retirement or for a rainy day. If you are automatically making these deposits, the time when you’re saving for a house can be a good time to press pause (with a firm commitment to come back and reactivate that savings once you have your home!). Similarly, you can look at your retirement and investment accounts and decide which ones have the fewest penalties for withdrawing cash early.
Give Up Expensive Hobbies for the Duration of Your House Hunt
It’s easier to cut our budget temporarily than it is to stomach a big lifestyle shift in the long-term. If you typically travel, play an expensive sport, or enjoy a particular pastime, consider how you could give those things up for the duration of your house hunt and divert that money to the home’s costs. It’s a hard choice, but doing it makes your house hunt a little faster and more successful.
Work Extra Hours or Find a Side Job
If you are cutting entertainment or leisure time spending, a good way to fill that time is with an income-producing side job or extra hours at your job. Make it clear in your mind that all the extra income from these efforts goes straight to the house fund, which can make it feel more meaningful to work extra. While not everyone has the bandwidth to work more, even a couple hours here and there can be a helpful 100%-deposit into the savings account.
Consider Downsizing, Renting From Family/Friends, or Renting Part of Your Home
If you know that your current housing is costing you an arm and a leg, finding temporary, cheaper housing can be a big way to save for your house. You can move into a cheaper rental for a year; the cramped quarters may be irritating but if you get a home long-term because of it, the year of living small can be an adventure. If your network includes people with spare rooms, consider asking if you can live with family for a few months while saving money, remembering to compensate them for the privilege of staying with them. For more information you can check the moving checklist here to find out the best and stress free move for you. Finally, if you own already, you might turn some portion of your home into a rentable space, getting a roommate or short-term renters. This source of income can offset some of your current bills, letting you save more before you work to sell that house.
For Longer-Term Purchases, Set Up Automatic Monthly Savings
If you know you want a house ‘some day,’ but not in the immediate future, leverage the power of time. Start an automatic transfer to a special house savings account, and don’t touch that money each month. When you get a raise or find that you have a little leftover at the end of a month, consider moving it to the house savings account also. Letting that money build up slowly gets you want you need in terms of cash but also helps you not miss the money in your budget.
No comments:
Post a Comment