How to Save Up for Your First House
It’s everyone’s dream to own a home at some point in their lifetime. Some achievements are considered milestones and undoubtedly owning a home is part of the bucket lists of most adults. Worried about where to start? Worried if you’ll ever own a cozy and spacious home where your kids can play freely? Here are steps outlining how you can save up and eventually become a homeowner.
1. Figure Out Your Budget
Before you even picture your dream home in your mind, settle on the amount you can comfortably spare from your income – don’t spend more than 30% of your monthly earnings to pay for your mortgage. Also, calculate other costs, such as property taxes and home insurance schemes. Plus, also take into consideration all the house repairs you might have to make. For instance, look into how much a window replacement in Oakland coststhat might come in the future.
2. Pay Your Debts
As aforementioned, your housing expenses should not exceed a third of your income. However, if you’re plagued by other debts, like a car loan or a student loan, these could prove to be a stumbling block to the chunk of cash you can present towards your mortgage. Make a point of paying off some of your current debts, which certainly alleviates some financial burden on your shoulders.
3. Find A Way to Save For Your Down Payment
A year or two years before buying your house, it wouldn’t hurt if you started living like you were by that time paying your new mortgage. As such, the difference between your current rental cost and hypothetical future mortgage payment should go to your savings account. The amount you accumulate can go a long way towards boosting your intended down payment.
4. Look for A Side Hustle
If you have a 9-5 job, don’t depend solely on your income for savings. You can turbocharge your monthly earnings by picking up a side hustle. When looking for ideas, look at the things you have a passion for or love doing outside your job. It can be freelance writing, designing graphics, etc. Remember, the more you earn, the more your savings.
5. Limit Your Expenses
It’s time to make do without some extras. The decisions you make might be tough; however, it shouldn’t be lost on you why you’re doing it: home sweet home. If you take five pints of beer every week, it’s time you cut down to two. The difference might not be that high, but can you imagine the ripple effect this technique could have on all your other expenses?
Why Not Go for It?
Famous producer and pioneer of the US animation industry Walt Disney once said, “All our dreams can come true if we have the courage to pursue them.” If you dream of owning a home, its actualization can be a long and arduous process that warrants huge sacrifices and key among them involves cultivating a culture of saving that will put you in good stead towards homeownership.
That said, buying your first house isn’t something you should commit to just because your friends are telling you to do it. Take time to run the numbers to ensure everything adds up. Don’t rush into buying your first house if it doesn’t make sense for you at the time. Give yourself enough time to save – buying a house is a marathon, not a sprint!