Remember when you were a kid and all you wanted were those pink and red roller blades? You sold lemonade, did extra chores, and picked up babysitting gigs until you piggy bank was full.
As an adult, roller blades turn into cars and houses. Except now, a full piggy bank won’t pay the bills.
Saving for your first home can be as simple as selling lemonade if you follow these 5 tips.
Set A Goal
Before you get too stressed about saving for your first home, set a goal.
The first step to setting a goal includes creating a must-have list you’d like your future home to meet. Take that list, and compare it to homes available in your dream neighborhood.
How much does a home cost that ticks off all of your requirements?
Next, compare how much home-buying you currently have versus how much you’ll need to buy your first home.
There are calculators and formulas you can use to better understand the exact figure needed to purchase a specific home. Use the numbers and information you gathered to set a realistic goal for how much you need to save.
Create a Budget Sheet
Hold yourself accountable to sticking to the goal you set by creating a budget sheet or downloading a budgeting application on your smartphone.
It’s easy to lose track of spending, especially on items like coffee and gas, if you don’t have a system set in place to record every cent you spend.
As a real estate agent and mom of four I understand how tedious budgeting is, so to ease the pain I suggest downloading a mobile app that connects to your bank accounts, and automatically accounts for every dollar spent.
Automate Your Savings System
Just like your 401K plan, a portion of each paycheck can be put away automatically each month.
Many companies and banks have to option to systematically save. It’s a great idea to select a recurring amount or percentage to be taken out of each paycheck that gets put into your New Home savings account.
Place earnings inside a high-interest savings account to get the biggest bang for your buck. This is beneficial for individuals who struggle with budgeting.
Downsize & Sell Out
There are many ways to profit from downsizing your life. Your home and car are two quick ways to start saving for your first home.
Rent can be expensive, but it doesn’t have to be. If possible, moving into a less expensive house or apartment for a year will expedite the saving process.
Car payments are costly too. Replace a lavish car with an economical alternative to save money on monthly expenses and gas consumption.
Finally, there are many small ways to downsize that add up. Go through your storage garage, basement, and house to find items that go unused. Start with furniture and appliances, as they produce the most revenue. Lastly, sell shoes, clothes, and handbags to top off your coin collection.
Be Picky About Prices
Before buying ANYTHING ask yourself these three questions:
1. Is this item a want, or a need? (If it’s a need, move to question #2)
2. Is this item worth the price? (If the answer is No, move to question #3)
3. Can I buy this item for cheaper somewhere else?
The combination of the mentioned questions will help ensure that everything you buy has a purpose, and is at the right price.
Something I recommend my Ankeny real estate clients to do is to check the Sunday newspaper sales ads before making a big purchase. Chances are, somewhere in town is having a sale. If not, discount stores like Aldi are a great alternative for everyday purchases.
If you stick to these 5 tips on saving for your first home, you’ll find yourself in a suitable situation in 12 to 24 short months.
You’re THIS close to buying your first house.
When you get there, I’m ready to help.