I have always been a piggy bank, money-in-a-jar kind of saver. The idea of setting a goal and dollar by dollar literally watching my savings grow has its appeal. Who doesn’t love a bank stuffed with cash? As a kid, I was usually saving for a toy of some sort which of course isn’t the case anymore. But even though my purpose for saving is now considerably different, the concept is the same. Knowing your financial goals is a great first step in saving. And like a money jar, organizing an outline for achievement gives you the opportunity to see the growth as you work toward your goal. Getting your finances ready for homeownership may be among your most important saving endeavors so you will need a plan.
If you are reading this, you probably have some inkling that you want to buy a home. It is estimated that saving for a standard down payment on a median-priced home can take 6.5 years* although many people aim for a home that they can save for in two years. But don’t let those numbers intimidate you, there are numerous factors that affect the time it will take to reach your homeownership saving goal. You will just need to figure out where you land in the spectrum. Starting early and with a clear target will benefit you.
Confident Home Buyer Tool Kit Tips:
There are numerous factors that affect the time it will take to reach your homeownership saving goal. Starting early and with a clear target will benefit you. Start with Step 1: Create a Timeline of the Confident Home Buyer Tool Kit to help you set targets to keep you on track.
First get familiar with the costs surrounding purchasing a home and homeownership. Check out the following articles to help you get started.
Create a budget, open a savings account, and find a financial mapping tool that works for your style of saving so you can easily maintain oversight. Step 3: Understand Your Finances of the Confident Home Buyer Tool Kit can help you get started with budgeting for homeownership.
Saving for a home can be hard work, but a well-managed savings plan will help streamline some of the tougher steps in the home-buying process.
When you get started there are lots of questions that may start swirling around in your head. How much do I need for a down payment? What home prices can I afford? Do I have enough time to save? These are important questions since you will need to get familiar with the costs surrounding purchasing a home and homeownership before you start saving. Advice from a REALTOR® you can trust will help answer your home-related questions so you can establish an initial financial outline. Right here in TruSite Realty’s Knowledge Vault there are also supplementary articles that cover down payment, closing costs and the expenses we tend to overlook or are unaware of. In addition, there are useful tools online to help you along the way, but if you decide to search for information on your own, be sure to use solid and reliable resources. Here are also a few general saving tips that can come in handy when you are ready to start tucking away your home-buying dollars:
Create a budget, open a savings account, and find a financial mapping tool that works for your style of saving so you can easily maintain oversight.
Set aside the equivalent of an hour of your pay daily for your savings.
Set automatic transfers to your savings account that are withdrawn before your monthly expenses.**
Automate bills for a clear sense of what you have and what you owe.
Get to know what you can afford to save. Start small if you need to and make saving a habit.
Aim to first save three to six months of expenses and make that your emergency fund. Then save automatically from each paycheck for your “dream” fund—in this case homeownership.
Pay attention to small or “luxury” expenses like buying a daily cup of coffee, gym memberships, cable, and eating out. Trim the excess where you can.**
Consider temporarily redirecting your IRA and 401K funds to your savings account until you have reached your goal.
Direct all bonuses, tax refunds and financial gifts to your savings account.***
These are just a few ideas among many to approach saving for a home. Take the time to figure out what method works for you so you can be consistent. Saving for a home can be hard work, but a well-managed savings plan will help streamline some of the tougher steps in the home-buying process. So, prioritize, get creative and start saving. Money jar optional.
About Eshe Kamau-Newman
Eshe Kamau-Newman is a married mom of two, a native of Brooklyn, NY, and a super-fan of words. She can usually be found crossing T’s and dotting I’s as a freelance Proofreader and Copy Editor or blogging and copywriting when the mood strikes. Eshe lives for her family, her faith, helping others, and dancing like no one is watching.
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