How to save money to buy a home
These tips are the important basics for saving before you buy a house.
You’ve read all those articles about how millennials can’t afford to buy houses because they love avocado toast too much.
The media paints them as frivolous never-savers who can’t resist dropping hard-earned cash on new trends.
We’re here to tell you that they’re all wrong, and that you can have both.
• First, start keeping an eye on property websites to get an idea of the kind of place you’re going for. If you’re a first time home buyer, it’s probably a good idea to start small. A small apartment in a good part of town is a great way to get your first step up on the property ladder.
Read: Helpful tips for using gas in the home
• Second, you will need to start saving. The more you put away, the quicker you’ll be able to reach your goal, but any small bit will help. Be smart about where you save your money, as certain types of savings and investment accounts will earn you higher returns and ultimately more money in the long run. Your two biggest upfront expenses will be the deposit, and associated fees. The more you can pay into your deposit, the less your monthly bond repayments and overall long-term cost will be. A good credit score is also a key factor in not only receiving a bond, but one with a favourable interest rate.
• Third, don’t disregard ‘free’ money. That’s money that comes to you via tax returns, inheritance, contest wins, hidden treasure chests, etc. It’s easy to think of this money as separate from your main income, and therefore use it to splash out on something you don’t need. It’s hard, but it’ll serve you much better in a savings account. That goes for raises too. Instead of upgrading your lifestyle, think about saving or investing the difference instead.
Read: Must-haves for first time home buyers
• Fourth, couple up. This is obviously an optional point, and you definitely shouldn’t get into a relationship just so you can buy a house. But that being said, double the income also means more money to put into a deposit, or a slightly better and bigger property than you would have been able to afford by yourself. Note that if you do go this way, be sure to set up a contract between you and your partner to protect both of you if things ever go south.
There are a few more ways you can earn and save money, like selling stuff you don’t need, downgrading your car, setting up a side hustle to earn extra income, sticking to a strict budget, etc. but the above tips are the important basics for saving before you buy a house. Once you’ve reached the buying stage, there will be a few other important purchases to consider. You’ll need life insurance, and you may want to renovate.
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