Saving for a new home, or your first home, is one of life’s biggest challenges and there are some great approaches to help you achieve your target amount faster. Saving for a house can take months, even a couple of years. While it can feel a little daunting, everyone who has gone before you has managed to achieve it, so don’t give up.
It is essential that you fix on an amount you wish to save and have a good idea of the type of property you want to buy. Be realistic, though. Don’t set your sights on a beachside penthouse if you can’t afford it. Maybe you’ll have to get into the market with a small apartment and then work your way up the ladder. It’s what most people do.
For those earning a good salary, a fair question is why you might need a deposit if you can make the repayments for the total loan you’re requesting. Banks usually will not grant a loan without seeing your credit score and a history of financial responsibility. \
Here are some great tips to get you in the game.
- Set an overall target and timeframe for the amount you wish to save.
- Budget for success. Make sure you put aside a set amount of money every payday that will meet your savings deadline.
- Don’t make your life miserable, or you’ll risk not sticking to the plan.
- Review the big items you spend on each month. If you have rent and car payments, consider how you might be able to reduce these. Perhaps you can move back in with your folks so you don’t burn cash on rent. If you’re buying with a partner, question whether you both need cars.
- Continually review your plan. Perhaps you can consider taking lunches to work, reducing your takeaway coffee intake, switching to a cheaper supermarket and catching fewer cabs. There’s usually a way to squeeze a little harder.
- Take the money straight out of your wages. Set up a bank transfer so you never see it. That way, it’s less painful.
- Earn interest, even though rates are super-low at the moment. Nevertheless, put your savings in an account with the highest-earning interest rate. Be aware that sometimes these accounts lock away your money for set periods of time. So, make sure you can access it when you need it.
- Reduce your debts. When banks consider your application, they’re going to bake into their calculation the money you owe and your repayments. Every dollar owed will adversely affect the loan amount you’ll be granted.
- Crunch your expenses. Reign in your retail spending and nights out. Scale down holiday plans with a stay-cation.
- Kick-up cash flow. Consider a second job and be sure to tip any bonuses, commissions or unexpected windfalls straight into your savings account.
- Sell what you don’t need and stick it straight into savings. Hold a yard sale or embrace online sites such as eBay and Facebook which offer great opportunities to turn trash into cash.
Article From ActivePipe
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