Unless you already have the money, you need a realistic timeline for when you hope to be able to buy a house. Of course, this timeline is dependent on the individual. A newlywed couple, for example, will be more eager to buy a home than someone who has just finished school or started a new job. One may be looking at a 2-year period, while the other is content with a 5-year period. In either case, timelines allow you to work and plan more efficiently.
2. Automate your savings
After you’ve established a reasonable timeline, you should also establish a reasonable regular savings amount. It can range from 20 to 30% of your monthly income, but you must stick to it. Missing your savings is a sure way to not meet your goal by the deadline. This is something that automation will handle for you. Choose whether you want weekly or monthly deductions and leave the rest to the savings app.
3. Don’t rush
To be honest, saving for and purchasing a home takes time unless you are extremely wealthy. Don’t give in to the pressure to get into your own space as soon as possible. You have other bills to pay, and unless you want them to suffer while you save for the house, you need to give yourself enough time.
4. Lifestyle fit
If you move frequently or are frequently transferred from your job, buying a house may not be a good long-term option, especially if you do not yet have a family. You should also avoid purchasing something luxurious if you live a conservative lifestyle. This is due to the fact that purchasing a home is only half of the overall plan. Consider the upkeep and stress of maintaining a house that does not suit your lifestyle.
Affordability is one factor that will help your savings goal become not only more realistic but also much more attainable. The more expensive the property, the longer it will take to save for it. A very expensive home will put your dream of becoming a homeowner on hold, especially if your income is low.
6. Cut down your expenses
By reducing unnecessary spending, you can live within or even below your means. The money you save by being frugal can be added to the funds you hope to save for a down payment on a house. Assume you usually spend $50,000 on something unimportant every month. If you put this money into your housing fund, you can save an extra $600,000 per year.
7. Multiple streams of income
Having multiple income streams can help you save faster than trying to manage and budget only one. If you only have one income and have to wait four years before you can afford a house, having multiple income streams can literally cut that time in half.
Never go house hunting on your own unless you are an expert in construction and real estate. Consult with experts you trust, such as a real estate agent or a building surveyor. When you find the ideal property, ask the pertinent questions and ensure that you are satisfied with the answers.