At first glance, looking into buying your first home can be daunting and even discouraging.
After all, just the initial process alone seems riddled with expenses and hurdles you have to get through.
By now, anyone and everyone familiar with how real estate works understands that there is a down payment when it comes to buying a home (special circumstances excluded). And let’s be honest, it’s no small sum to be forking over all at once for most people.
Unfortunately, the down payment alone is often enough to keep aspiring homeowners from taking their first steps towards total independence; and we understand that. Being apprehensive about unknown expenses and responsibilities is just in our nature.
Yes, the word “down payment” feels like a punch to the gut. But there are so many ways you can alleviate that stress and responsibly prepare yourself for the giant payoff of finally owning your own home.
We have a few savvy tips that will get you ready to finally take that big step; let’s get started!
1. Career Adjustments
Buying a home is a big decision; that said, you want to make sure you are in a place in your life where you feel secure with what you do for a living, where you do it, and the growth potential you have in your position.
For some individuals, this part of the process can set the tone for the length of time it may take to fully prepare for buying a home.
If you aren’t where you want to be with your career and see little potential for growth and/or longevity, making a change will be your first big step toward readying yourself for homeownership.
Find a job you can enjoy that offers livable wages and long-term potential for bettering yourself, both financially and personally.
2. Consider Co-living
Deciding to have a roommate for a while (or even living with your parents) is a great way to really put away some money and prioritize your future goals.
Although co-living is not ideal for everyone, it is a great way to fast-track yourself to a down payment and your own new home.
Although it’s not the most exciting tip on our list, and you likely groaned immediately, it’s a significant consideration. That is if you are truly serious about saving money and getting ready to be a homeowner sooner rather than later, so don’t ditch the idea just yet.
3. Make a Plan to Knock Down Debt
Debt is a very serious anchor that unfortunately finds its way around the ankles of many people these days and often stays there for far longer than it has to.
Understandably, having to throw money towards your debt pile feels grueling while you’re trying to save for a home.
But, the last thing you want is to deal with your debt affecting whether or not you get approved for a mortgage loan when you’re finally ready to move forward.
4. Cut Out Unnecessary Splurges & Manage Your Expenses
Although this part of saving money is technically easy, many struggle with cutting out unnecessary expenses.
Sure, your Starbucks coffee order only costs 4-6$ and having multiple streaming networks helps you relax when you get home with your take-out; but let’s get real –
Unfortunately, those expenses add up quickly and will attribute to the length of time it takes you to pay off any debts and save enough for your new home.
If you want to make it happen, it’s time to give yourself some tough love now in order to reap the rewards of being a new homeowner later.
Start by going through your bank statements and eliminating all unnecessary expenses, especially the recurring bills that you forget come out of your account here and there.
5. Open a Savings Account
Last but certainly not least, open a savings account and begin to focus all of your attention and energy on working hard for savings and PAYING YOURSELF FIRST!
The “pay yourself first” mentality is a great habit not only for specific goals but also for a lifetime of financial security and independence.
Once you’ve mastered the steps we’ve listed out for you above, go into your savings account settings and schedule recurring payments to yourself directly from your checking to your savings account.
Consider paying yourself regularly a priority; you can even call it a bill if you need to.
You can determine how much this sum should be and how frequently it should be transferred to your savings account by carefully and responsibly calculating all of your necessary monthly expenses and what you can afford to put away.
Hint: The money you WOULD HAVE continued to spend on your Starbucks, streaming services, and take-out is a great start for paying yourself on a regular basis. These days many banking apps allow you to see exactly what you spend monthly on food and entertainment.
Example: If you spend roughly 100$ a month on unnecessary expenses, you can easily afford to put that much into your down payment savings and/or towards your debt expenses every month.
Five Large Steps Closer to Success!
With these five critical tools for saving money and developing financial stability, you will be well on your way to buying your very own home in no time!
It’s important to remember that no one ever said it was easy, but the keys are as good as yours with the right frame of mind, hard work, and genuine dedication!
Once you’re ready to start searching for your new home, give Key Realtors a call at 281-454-4500.
Our team will be more than happy to guide you through the next phase of your homebuying journey.