Save For a Home in One Year
If you didn’t already know, when owning almost anything like a car or a home its best to have a down payment. According to trulia.com, saving up for a down payment and other expenses like closing costs is the biggest obstacle people face in homeownership. As I stated in the sentence above, there’s much more than just a down payment and closing costs, there are escrow fees, home inspection, and payments on taxes and insurance for the home.
When it comes to budgeting and saving money in general, you need to check exactly where all your money goes to so you know how much money you need to save up for the year.
Here’s an example: If you’re looking for a home in D.C. that’s $300,000, you’ll need $60,000 down if you’re doing a 20% down payment. If you divide 60,000 into 12 months you’ll need to save 5,000 a month in order to reach your goal of $60,000 at the end of the year. I know that sounds like a lot, but this is just an example. Remember, for first-time homebuyers you’re able to buy a home with as a little as 3% down, I wouldn’t recommend it, at least try to do 10% down.
Budgeting and saving money is definitely hard especially having to change lifestyle habits, but its the small things you change that can definitely add up in 12 months! Here are some tips on how to save for a home in one year:
Cut down on rent:
One of the best ways to save for a home and money is to probably cut down on your rent, which means maybe get a roommate, move in with a friend, or family member. That way it’ll cut your rent in half which can save a lot of money each month! Not only will rent be split, but also utilities like gas, electric, water, cable/internet, etc.
Differentiating Between Wants and Needs
This can be hard for some people, trying to differentiate whether you need something or if it’s just something you really want. Next time you go to the store or want to go out to eat or grab a drink ask yourself, “Is this something I really need or have to do?
Be Smart About Your Money
I’m sure you have cable but only watch certain channels, on average people spend at least $100 per month on cable. Try cancelling your cable subscription and get Netflix or Hulu and even devices like the Amazon Firestick or AppleTV.
When it come to your cell phone, many of us have unlimited data, check to see how much data you actually use every month and reduce your phone plan to let’s say, 10GB a month.
Cancel that gym membership you have that you pay every month and work out at recreational parks or at home! Be more productive in your time during the weekends instead of partying and drinking. Not spending money on the weekends can save you about at least $45 a week if you’re the type to eat out and party a lot.