For younger generations, it can feel like you’ll never own your own home. Between paying off school loans, renting, and the other costs of living, being able to save up enough for a sizable down payment on the type of house you’re looking for can seem impossible. However, the good news is that plenty of people achieve this goal and there are various ways you can too. Here are some tips on saving for your first home.
Evaluate your expectations
First of all, if you feel like it’s impossible to save for a home, yet you’re earning a decent income, it’s time to take a look at your expectations of a home. If you’re single and don’t have kids, there’s nothing wrong with looking for a house that’s smaller than you had originally planned; even with kids, many people purchase homes that are larger than they need or can afford. Consider the area you want to live in as well; you might be looking somewhere more expensive, when there’s a nice neighborhood close by with more affordable homes.
Look into loan options
It’s beneficial to save as much as possible for your down payment, but there are also plenty of loans that can help make meeting your down payment easier. There are loans at the federal, state, and local level; some give you money to put toward a down payment and others lower the percentage for your down payment. You should also look into whether or not your employer offers assistance when it comes to purchasing a home in the area.
Get rid of high-interest debt
The faster you pay down debt, the less you’ll pay on interest, and the sooner you can begin putting that money elsewhere. Pay off any high-interest debt, such as credit cards, as quickly as possible so it’s easier to save money for a house.
Crackdown on your budget
No matter who you are, even if you currently budget, it’s likely that there are areas you could cut back on when it comes to spending. Take time to carefully go over your budget and see where you can save more money. Then, put this extra money into a savings account for your home instead of spending it on something else you don’t need.
Avoid increasing your lifestyle
As you gain salary increases or get your tax refund, avoid using that money to increase your lifestyle. Many people struggle with budgeting and affording their home because they increase their cost of living as they earn more. Instead, put any extra money toward saving for your home and paying off debt.
Find a second job
Even if it’s just for a few hours a week or an occasional side hustle, getting a second source of income can be helpful. You can put all of that money toward saving for your home while also increasing your work experience and skills. You may find a side hustle that you enjoy more than your current job!