Personal Finance

Some simple steps to save money to buy a home

To own a home is most of the ordinary citizen’s biggest dream. But for many, it is a farther dream as well. The cost of building a decent house is sometimes exorbitant that it defies logic. This is the case when one wish to build a house simply for staying or as a means of shelter and the location he had in mind was in some prime area. One can bring down the cost of the property and hence the home, by looking for a remote location away from the center of commerce but with ample connectivity. Still there is a money element involved that exceeds the limit of a normal savings account. Hence more financial mobilization is required so as to raise the required amount and therefore enhanced saving plans.

Keep a house-fund in this regard. Let us see in which all ways we can save money to buy a home.

  • No money should be withdrawn from the house-fund. Money only goes in.
  • Take a fixed amount from one’s monthly paycheck – be it 5%, 10% or 20% – and put it in the house-fund account. In order to avoid temptation, you can ask the employer to deduct the amount before giving you the reduced paycheck.
  • Intelligently divert any windfalls like a lump sum of money from a tax return or a gift into the account. Pretend as if nothing has happened.
  • Go for shopping food, clothes and other items if in absolute need. Keep a written list of things to be brought in order to prevent one from doing impulse purchases. In most cases, we spend hundreds of dollars in such non-planned buying.
  • Avoid outside entertainment and eating out frequently. If desperate to watch a movie, rent a video and invite some friends over for a potluck.
  • Letting other family members know that you are saving money for a home does a world of good. They will understand the fact that the gifts and extras will be put on hold while you are saving. Be stringent in stashing away the money you otherwise would have spent.
  • Every penny counts when it comes to the final amount for the home. Drop all spare change into some cup/bottle and at the end of the month, transfer it to the account.
  • Do away with the unwanted items at your home with a garage sale. This, one can do by involving the neighboring families as well. Such a move will definitely increase the draw to your sale. Also there will be less remaining for you to carry, when the construction for the new home becomes complete.

These are simple steps any one can make use to save money to buy a home. These simple steps can be used when he/she is focusing more on saving money before applying for a loan. Applying for a home loan will definitely get you there to your dream but in order to have the initial capital, one need to follow a stricter savings regime. A disciplined management of one’s finances is critical in this respect. Give it a thought and see how well you can save money to buy a home.