A change in lifestyle, if necessary, should happen when you plan to save up for a down payment. Your goal to become a homeowner will significantly affect your priorities and the way you will spend your money.
Let us set things straight and be truly honest. Even if you have more than what you need to your bank account, investing in a property will create a great impact not only in your lifestyle but also in the way you steward your finances. You will need to cut down on certain and less important expenses.
A home might be the most expensive purchase you will ever make in your lifetime. That is why it is just appropriate to find one that would be of equal or greater value than your money. Not to mention, it requires intensive research and trustworthy judgment to find a house that would best suit your needs.
It is never a bad thing to ask for an opinion and guide from people, particularly the real estate professionals, to learn the process of home buying and to consider if the one you are eyeing for is worth the money you will lash out. Understand that you should not jump into the pool of home seekers just because you want to have a house. Do not decide out of a whim; your decision will change your life. Check if you are financially ready so you won’t suffer the could-have-been-avoided consequences.
How does your dream home look like?
Let the appearance and benefits of your future home inspire you to save up for a down payment.
To obtain the key to your dream home, you usually need to prepare a down payment worth 20% of its total price. More so, you need to have extra for other necessary payments and expenses like monthly fees, taxes, and for the upkeep after your move in.
Purchasing a home is never easy and should be done with prudence. It is utterly crucial to saving money for a down payment especially if you want to own a home while you are still young.
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ToggleEstablish a Budget
Yes, you have a picture of that lovely home in your mind and it promises a better quality of life, but the question that will set your direction and will help you decide is this: How much can you afford?
Recognize if your income is stable and sufficient. Check if it can allow you to make a home purchase. Figure out and calculate how much you will need. Determine how much you can afford by establishing a budget for all areas of your life as it would also help determine your budget for a home.
Commit to Saving
In reality, it is not about how much you make, but how much you save that matters. It is possible to get another job to bring in more income. You can even turn your hobbies into paychecks. However, if you are not positively aggressive and committed to increasing what you have in your savings, you will experience difficulty and delay will be inevitable.
Remember, you are signing up for a long-term commitment. Set a financial timeline and follow it no matter what happens. Also, it is preferable to open an account solely dedicated to your savings for your prospect home. Doing so can help you track your progress. Decisively separate your savings from the rest of your cash flow.
Know Your Priorities
Discipline is the key to achieving your goal. You will not be able to save enough just by abstaining from buying your everyday coffee at Starbucks. You need to relocate where you put your hard-earned money. Cut down on unnecessary expenses. Are you willing to sacrifice some things so you can responsibly save? Reduce or eliminate some of your expenses. Do not splurge on trivial possessions. Treat yourself once in a while, but never overdo spending cash on unimportant stuff. Make a list of the essentials and the non-essentials; buy only the important and urgent things.
Always ask yourself out loud if you need or just want what you are planning to buy before including it in your shopping cart.
Track and Budget Finances
It pays off to track where your money is going. If possible, even create a log where you can record your expenses. This will help you find out how much you can probably save. Create a household budget and examine your spending patterns. Whenever you get your salary, budget it. Set a daily financial plan.
Have the initiative to set aside a percentage of what you earn and dedicate it to your down payment savings. Figure out and calculate how much you should save every time you get your paycheck and stick to it diligently. Deduct the required amount from your income and utilize the remainder. Do not haggle with yourself. Transfer the money immediately to your savings account the moment you receive your income.
Prepare Financially
Always consider the future. Consider possibilities and the changes that might occur in your life in the next few years. Will your income be still reliable after 5 years? Can it still sustain your monthly payments and expenses? Do you have an emergency fund that can last for at least 6 six months in case you lost your job? Be ready and even anticipate unforeseen costs.
If you have debts, make sure they are under control – though ideally you should be debt-free. If possible, settle your debts before you make another major commitment. Prepare your pockets. Earn extra money the way you know how. You can also commit to short-term jobs to help you achieve your big goal faster.
Do Not Rush
It is better to establish a feasible plan than to not have one at all. Plan years ahead. It is unwise to buy a house just because you can already afford the down payment. Whether you have enough money on your bank account or not, it is better not to rush.
However, if you cannot afford to save a huge amount of money, for now, you can start small. And while you are at it, do your research about the market. Be an information sponge. Set the right expectations and develop adaptability because the industry is constantly developing.
The process of saving for a down payment requires diligence and discipline, and every step should be taken with discretion.
A proper mindset and perspective will help you create strategies that will motivate you to accomplish your goal fluently. While it is true that saving is not an easy task and there are no shortcuts to it, staying on track and keeping an eye on the prize will make you realize the worth of your effort.
The truth is, even if you have money for a down payment, you might still not be ready for homeownership. Before you decide to buy a house, make sure you are 100% convinced that you can stick to a lifelong commitment and not waver even when difficulties arise. Study your income and consider the future. It is important to let your salary influence your decision. Be entirely aware of your non-negotiable requirements when it comes to a home. It could be as simple as the number of bedrooms to a more complex one like the neighborhood where it belongs to. Be smart and be a good steward of your finances. As a result, you will see your efforts bear fruit in no time.
Remember, nothing worth it comes easy. How can you practice these helpful ways so you can easily save up for a home down payment?
Rob John B. Valencia works as a Content Writer for hoppler.com.ph, an online brokerage company in the Philippines that connects property buyers and sellers with an online network of trustworthy people. He likes to spend time with interesting people and talk about critical ideas that could spark change in the world. Reach him at [email protected]
