It’s never too early to start saving up money if you’d like to own a home someday. But if you’re one of the many Americans dealing with reoccurring expenses like high rental rates, credit card payments and student loan debt, trying to put away money toward a nest egg may not seem very simple. However, by taking a look at your finances, making some small changes and sticking to them, you can make some big strides toward being able to afford a house you love.
- Do Research
Saving money for a house will be a lot easier if you have a realistic idea of how much goes into the cost of owning a home. Do some research into the type of house you want to buy and the average cost of homes in areas where you could see yourself living. You can even use one of our mortgage calculators, explained in our recent blog, Using PrimeLending’s Mortgage Calculators To Help You Get The Right Home Loan. Talk to a loan officer to see if you qualify for a mortgage, and if so, learn what some of your options are.
It’s also a good idea for you to know what kind of credit you have. Good credit can help make the home buying process easier and possibly even get you a better mortgage rate, but if you don’t have great credit, you can start working on making changes. You can get a copy of your credit report from reporting agencies such as Experian, Equifax and TransUnion. For more ways to build better credit, visit our blog, Simple, Smart Habits To Build Better Credit.
Take a good look at how much you’re spending each month and decide where you can cut expenses. Little things can make differences. For example, your daily caffeine fix from your favorite coffee shop might not seem like a big expense, but it really adds up each month. Keep track of your spending by regularly checking your bank account and receipts. Based on your paychecks, you can create a monthly budget with a set amount for how much you can spend on extras, like going out to eat, shopping, etc. If you want some additional assistance in setting up a reasonable budget, Mint.com is a free tool that helps break down how you spend your money and how to help manage your financial goals.
- Look for Extra Ways to Make Money
If you’re serious about saving for a house, consider looking into extra ways to make money. There are a lot of ways you can do this on the side with flexible hours — driving for a ridesharing company, pet sitting and working as a mystery shopper are just some of them. For some additional ideas, visit The Penny Hoarder. If it’s possible for you to work additional hours at your main job, talk to a manager and let them know that you’d like to take on more work if possible.
Based on what you decide your monthly budget is, make sure you’re putting a certain percentage of your paychecks into your savings account. To help you with this, you can set up your paychecks to be directly deposited into your savings account instead of your checking account. You’ll be surprised how quickly your savings account can grow if you do this and also add in any extra cash that you may earn, like bonuses and tax refunds.
At PrimeLending, we want to help you get the home you deserve. That’s why we offer a variety of home loan products for different budgets. If you’re thinking about buying a home, contact one of our loan officers today to learn more.
From the PrimeLending blog by Sarah Crandall