It has become harder and harder to find ways to save money toward the purchase of a home. For smart renters who wish to buy their first home, they know that now is the time to start to make their move and buy while prices have stabilized and values are slowly heading upwards. But there is that pesky down payment a renter must come up with to become a buyer and homeowner.
Saving money each month is difficult for most of us. The cost of living has not gone down, and things like gasoline and groceries continue to eat up the average person’s budget. Often, it is hard to save for something like a house, which is not an instant gratification purchase. Saving for (and buying) a home does not happen overnight. Many of us are all about instant gratification shopping, so putting money aside for a “dream” home to buy in the near future may not seem like something we must do today. For many, if we are not about to buy it tomorrow, it does not seem tangible or real. The problem is that if you don’t start saving, it may not ever be tangible and owning your dream home will stay only a dream.
Here are a few tips to get you on the path to saving, something many renters have not yet started.
- Begin: That is right. The first step is to actually do it; place money aside from your next paycheck into savings and do not touch it. Open an account for just this purpose and commit to adding money to it each month. Begin with your next paycheck and resist the urge to put it off just one more month.
- Make a habit: Savings is about creating a habit. It is an exercise in willpower not to spend the money elsewhere. It is an exercise in keeping the promise to yourself not to splurge on the expensive iced coffee for your mid-day pick-me-up. It is giving up that vacation, which will only give you a few days of pleasure, and instead committing to putting that money toward homeownership, which can last a lifetime. Create your habit by setting a plan of what you will do differently to save money and how much will be saved by your plan. For example: If you spend $5 each weekday on drive-through coffee and you give that up, you could be adding $25 to your savings each week or a $100 per month toward your down payment on a home.
- Write it down: Put into writing “why” you want to own your own home, make copies and put them up at your desk, in your car and on your fridge. If you have a dream home in mind, cut out a picture and stick it in your wallet. Find ways to remind yourself each day of your goal.
- Expand your saving plan: Look for less obvious ways to save. Can you cut back on your cell phone plan? Can you eat out less or choose less expensive places to go. Can you brown bag your lunch and save a ton on buying lunch each day? Can you cut back on your cable or landline phone costs currently in your budget?
- Get excited about owning: Read and educate yourself on home ownership. Watch HGTV and learn about home repair and how to plant a garden. Sounds silly, but if you get yourself in the mind-frame of a homeowner it will make it seem more real to you. If you start to know the things you would love to do with your new home, you will be more motivated to save and make it a reality.