Most people find it hard to buy a house, where buying isn’t the problem; it’s the saving for a house that becomes the hurdle. The process of buying a suitable house is a complex one, let alone the checklist you make becomes a long one. You have your current savings and the future home in front of you. Whatever is in between needs your dedication and commitment to save and buy the house you desire.
Along your way, you will come across a landslide of multiple factors, like your income, responsibilities, debt, funds, and everything related to money that could hinder your way and put your savings into jeopardy.
However, saving for a house and its down payment might take much time, but using the right methods can help you trim down the hurdles effortlessly. So, what do you need to buy a house?
From strategic planning to automating your savings, here are some timeless ways to save for a house – whether it’s now or within the next few years. Keep reading below if you ask, how much should I save for a house!
1. Calculate How Much You Have Vs. How Much The House Costs
Before setting down your objectives for buying the house, you must first compare your saving with how much you need to buy the house. The current saving might not equate the sum you will need later, which is why you first need to break the saving money for a house into sections. Down payment or 20% of the overall house cost must be your first resort.
Down payment enables you to invest a chunk by giving you an ease of mind. You can designate a certain amount each month and aim for about 10% or 20% for down payment. Start bit by bit and explore other areas, so you gather a good saving.
2. Hire A Real Estate Agent
If there’s a house you’re eying, it’s better to start with in-depth research. But if you need an expert opinion, get hold of an excellent realtor who can guide you of the latest home market trends along with all the pros and cons.
Hiring one will help you become clear about how you have to organize a plan. Instead of confiding in your research, an experienced realtor can help you find the real details about the home prices, neighborhood, locality, and market fluctuation. If you aren’t sure about how it’s the best way to save for a house, you can ask for referrals from family and friends. If it’s someone you know, you can even negotiate the fee as well as have your money saved with their expert advice.
3. Automate Your Savings For A House
Saving to buy a house on the usual salary is impossible when you have to manage all your expenses and savings. Need a leeway? Automate your savings. When you plan your finances automatically, you can pay bills automatically and even automate fund transfers ranging to online credit card payments. If this system suits you, you can even set up scheduled transfers to save funds for your house. You can also add a brokerage account to keep your down payment and other savings in check.
4. Create Secret Auto-Deductions In Your Bank Account
What do you need to buy a house? The best way to save cash is by keeping your money in one place and forgetting about it. As soon as you receive the paycheck, you can create an automated deduction to save a particular amount. From the remaining amount, you can designate your budget along with your savings and expenses. If you’re securing the auto-deducting fund for the down payment, it’s better to leave it alone until the time you are making serious decisions about buying a house. This way, you’ll remain focused on achieving than worrying.
5. Consider Debt-Repayment Options
No one likes debt, but we all have it in one form or the other. Most of the time, people are wanting to pay several debts off, thereby neglecting the major ones. The ideal strategy for anyone to pay debts is to separate debt payoff for your house while also paying your card bills, car loans, or college debt.
Another option is to pay your debts in ascending order, moving from minimum to the maximum or vice versa. You can pay smaller loans first while putting the major ones for the end. No matter which approach you choose, you will have a clear idea of protecting your savings and paying your debts in a precise order.
6. Get A Money Market Account
If you ask a money expert, they won’t ever recommend you investing your down payment money into something that runs risks or is a long-term account. You might want to access the funds within a few months, for which you need to be strategic about the type of short-term account you need. In that case, you might want to get an online money market account that helps you withdraw your money in between three or six months, so your saving for a house plan becomes actionable in no time.
The money market account also helps you pour extra cash in your pockets. Just make sure you oblige by the rules and restrictions, so your money remains within your reach.
7. Use A Personal Finance App
If you feel pressured by the saving process and the paper record bothers you, you can use a financial app to keep your saving goals on track. A good expense tracking software can help you save your income, categorize your expenses, and savings, it can also help you track your debts with estimated or actual payoff countdown.
Also, some might be good enough to offer you a chance to earn an extra amount of cash to keep ‘saving for a house’ on high priority. As you continue using the app, you will notice that it’s the best way to save for a house that adds an overall improvement in your money management plans.
8. Add The Windfalls In The Savings
Apart from the money you earn and the one you get from doing the side job, the windfalls come as the extra amount you receive without an effort or the one that you earned as leverage. It could include a raise, a cash present from grandparents, or a tax refund check you didn’t expect in the first place.
Instead of treating this cash as fun money and spend it on food, shopping, or even a vacation, use it as an accelerating factor for your savings or debts payoffs. What’s more, these could have a surprising impact than having you cut down the costs of coffee or dining out. Keep your eyes focused on saving for the down payment as the ultimate prize.
9. Start A Side-Hustle
Sooner than later, everyone having a primary earning source wants to maximize their income source. The best way to do so is to start a side hustle. Apart from your usual salary, the best way to save for a house is to run a side business, because it can help increase the saving/debt-paying goals, suiting to your convenience.
You can choose the side hustle as you want because it’s up to you. If you wish to start walking dogs or initiate a catering business, the side hustle can help you collect massive savings for a house.
10. Create An Ideal Timeline
Whenever you’re going to buy a house, the timeline will help you keep track of all your actions and goals. Apart from the time it’s going to take, you will know how far you’ve come across in a matter of a year, five years or even ten years.
Also, the timeline will help you keep focused on the goal, cutting out the distraction and splurges of extra spending.
11. Share Your Goals With Others
Sharing your savings goals with people isn’t a bad idea, especially if you want to save for a house. If they know about your goals, they might help you by gifting you cash or providing you with anything that helps you get closer to your goals.
If you’re going to tell them about your saving program for a house, you can also get some advice and even help them understand if you decline their offer for hanging out or organizing a party.
12. Create A Separate Savings Account
Money gets spent all the time, whenever it’s placed in an inconvenient location. The best thing to keep the saving money secure is to put it in a savings account dedicated only to the down payment of the house. With the savings account, you will be able to earn interest that will help increase your saving for a house.
Once you put your money into this account, it won’t be the cookie jar that can be accessed again and again. You leave the money in the account and forget about future planning – until you get the house.
So, What’s The Plan?
Whenever you’re going to buy the house, saving can be overwhelming. With the ways mentioned above, this journey can seem a bit less tangled and a bit more seamless. Keep your math right, and keep your goals straight, so you become confident about saving 20% for the house down payment. Fix your eyes on the trends as the market is always fluctuating. Make sure you’ve been saving for a house in the best possible way.