FINANCIAL WELLNESS

3 min read

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Mar 2022

5 Money-Saving Tips for Buying a Home

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WHAT YOU'LL LEARN

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How to craft a budget

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The art of the side hustle

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Saving can be automatic

filled check icon

WHAT YOU'LL LEARN

check icon

How to craft a budget

check icon

The art of the side hustle

check icon

Saving can be automatic

Right now, is a fantastic time to start your preparations to buy a new home. Don’t get us wrong, taking out a mortgage is a huge commitment, and homebuying is expensive. But things might get a little easier if you know how to save effectively. Here are a few money-saving tips that’ll get you ready to dive right into the homebuying process.

Craft Your Budget

No matter who you are, it’s important to know exactly where your money is going each month. To get a better handle on your finances, grab your bank statements and credit card payment information to see each of the directions your money is pulled. You might not like what you see.

Perhaps you’ll find out you’re paying way more for fast food each week than you thought. Or maybe you’ll realize you’re still paying for a streaming service you haven’t used in months. In either case, that money could be going straight into your savings account for your down payment.

When crafting your budget, you should also have a goal in mind. A new home might be the light at the end of the tunnel, but you should decide how much you want to set aside each month and, most importantly, stick to that number.

Downsize

If you’ve never heard of the term, downsizing is the act of lessening your expenses to live below your usual standards. Often, people temporarily downsize until they meet a certain financial goal. Think of it like this: A company downsizes as a way of cutting costs, but in this case, the discontinued branches are your car payments or rent.

Prior to making an offer on a home, you might downsize by moving to a smaller apartment or selling your car. Downsizing is a means to a better end, but it’s certainly not for everyone. If your life won’t be hindered by selling your vehicle, and maybe you’ve been thinking about doing it for some time, it’s an option for those who want to get settled in their dream home as quickly as possible. Additionally, downsizing might help you afford the dream home that falls right outside your current price range.

Take Up a Side Job

Right now, it’s easier to get a side job than ever before. You’ve probably seen advertisements for ridesharing companies or grocery store delivery services, and you might have even seen a commercial centered around becoming one of their team members. If you have the time and that sort of side hustle seems appealing, you might want to consider applying.

But if that doesn’t pique your interest, you have other options. During the warmer months, you could walk the neighborhood dogs when their owners aren’t home or do other odd-end jobs. The money might not seem like much, but it all adds up. You may even consider directly depositing your side hustle money into your savings account.

Skip the Traditional Vacation

You might be planning for vacation in the summer rather than the spring, but now is the perfect time to consider a money-saving alternative to your typical costly getaway. The “staycation” is a great solution for someone who wants to take the time off with their family while they’re on a budget.

Your home can double as any relaxing destination. Have a spa day (or week) or campout in the backyard. Plus, you don’t have to exclusively spend your break from the comfort of your home. Spend more time than you normally would at local historical sites or the public pool.

Save Automatically

These days, you don’t have to manually transfer your money from your checking account to your savings. The wonderful thing about technology is it can do the hard work for you. Most banks allow you to assign a fixed amount from each paycheck to go directly into your savings. However, you need to ensure you can afford whatever amount you pick before diving into the world of saving automatically. It’s the best option for someone who doesn’t want to worry about making sure they save enough money each month.

Don’t Forget the Upfront Costs

Apart from the down payment, there are a few other upfront costs associated with purchasing a home. There’s homeowners insurance, property taxes, and closing costs, just to name a few.

The money you save from the tips above could help you make these extra payments with ease. And that means you’ll be springing into homeownership before you know it!