Not sure how to save for a home?
Although it is not easy to accumulate pennies, it can be done with the right tools and strategies.
Here are 10 simple ways you can start saving for your home today:
Open a savings account
Fortunately, you no longer have to go into a physical bank to set up a savings account. Today, many banks offer online savings accounts that customers can set up anywhere, anytime.
Opening an online savings account may help you earn more compound interest on your deposits.
The credit card and bank account comparison site notes that while physical banks still offer low rates
Online savings accounts continue to raise their rates - making it easier for users to earn a solid interest rate on their savings deposits.
Automate your savings
When setting up a savings account, be sure to automate it on a monthly basis. That way some of your paycheck will automatically go into your savings account before you are tempted to spend it elsewhere. Trust us - this small step will make a big difference in your savings and help curb the urge to spend your salary on unnecessary things.
Reduce the small luxuries
Now is the time to cut down on the cafe's daily cup of coffee and expensive meals. Other small luxuries that are easy to pause temporarily include cable TV, magazine subscriptions, expensive books, massages, manicures, meal delivery services, haircuts, clothing and any other expense that is not felt in most months.
Create a budget
Without a reasonable and realistic budget, you will not be able to raise enough cash for a down payment. Fortunately, creating a monthly budget is easier than it sounds. To get started, we suggest first checking carefully what goes in and out of your bank account each month. In other words: your income versus your expenses. After eliminating these small luxuries (i.e. magazine subscriptions, meal delivery services, etc.), keep track of regular and recurring expenses, such as rent payments, services, car payments and other bills. Decide how much you need (and can) put into your savings account each month. From there, find out how much money you have left to spend on various expenses such as groceries and food. Once you have set a realistic budget, you should be able to start saving in no time.
Save your tax refund or end-of-year bonus
When saving for a home, do not spend the hefty tax refund or end-of-year bonus on clothing. Instead, deposit it in your savings account as soon as possible. This is an easy way to instantly increase your savings and speed up the timeline of buying your home.
Freeze (or end) memberships in your gym
For many, a gym subscription is a monthly expense that they can live without (at least, for a short time!). So freeze or terminate your memberships to avoid paying high monthly membership fees while you save for the home. Instead, go for outdoor runs, find free classes or use free training apps.
Take more jobs
Save money faster by earning extra cash on a monthly basis. If you already have a typical 9 to 5 job, we suggest starting the side job you have been considering for some time.
Keep track of your expenses
Find a free personal finance tool app that makes it easy to manage your money and keep track of expenses. You can see bills, expenses and income in one place.
Mint for example.
Find a partner or tenant for the apartment
Paying rent alone? Try to find a temporary partner / tenant for the apartment to split your monthly rent in half. Chances are that your monthly rental check is your highest recurring expense. Living with a roommate can dramatically lower your costs. In addition, you can split electricity bills and general needs (toilet paper and paper towels).
Pay by credit card to get out of debt
While it is important to keep cash in order to save for a home, it is equally important to pay off any existing debt you already have. The reason? If you are planning to buy a home with credit, you will need a good credit score. Without it, you will have a hard time finding banks that are willing to lend you money for the home. Even if you manage to find a mortgage lender, your interest rate will surely be sky high. One of the best ways to improve your credit score is to pay off your debt (especially with high interest credit cards) and continue to make minimum payments as well. She first thought of owning homes.