So you are thinking about buying a home this year. New year, new decade…so why not a new home too? Saving for a down payment can seem like an overwhelming task after the cost of the holidays and especially if you’re on a tight budget. It’s not as simple as just making a plan. You have to be determined to stay on that plan and remain motivated even when unexpected expenses come up like car repairs or your kids needing a new uniform for soccer. Right now it may seem almost impossible to achieve your goal of buying your dream home this year. That is why it is important to set those goals now. Think of it as an addition to your New Year’s Resolution.
Make a plan and write it down
Get out a piece of paper or type into your phone/computer a definitive statement that summarizes your down payment goal – as long as it’s in a place you can easily access it. Then break down that goal by the amount you need to save weekly or monthly and a goal date for being able to buy that house. The simple act of putting your plan down on paper (or on screen) makes it real. Take out the piece of paper or pull up the email you wrote to yourself whenever you need a pick-me-up.
Make some budget cuts
It may not be easy. But saving for something as important as a new home is worth it. Look over your monthly bank statements for areas to cut back. Take out any set monthly expenses—rent or existing house payment, car payment, and anything else that can’t change. Then look at car insurance, health insurance, and anything else that could change if you made changes to your coverage.
Lastly, consider things like cell phone bills, cable, internet service. If you’re not using all your data on your cell phone plan, that may be a place to trim. Perhaps you don’t need such fast DSL service. Every little bit helps. Cutting down on your trips to Starbucks and eating out during the week can also make a difference.
Look for ways to make extra money
Do you have skills you could use to bring in a few bucks? Perhaps you can put your Spanish fluency to good use and tutor high school kids. Maybe you can take that piece of furniture you refinished and turn it into a weekend business, hitting early-morning garage sales on weekends and selling your pieces on Craigslist.
Don’t become a hermit
Cutting back doesn’t have to mean locking yourself in your house, never using any gas, never going to any movies, concerts or seeing your friends socially. But make sure your friends and family know about your plan so they can support you while you’re saving. And you can involve them in your plan by enlisting their help to plan fun and free (or cheap) get-togethers.
Keep your eye on the prize
When everyone jets of to Hawaii or Europe…or even Vegas for their summer vacation, you’re probably going to be tempted to use some of your savings with the intention of paying it back later. Don’t! Just remember that you can always go on a vacation next year after you have closed Escrow and settled into your new dream home. Coming home will be much sweeter.
Keep Up With Current Market Trends
If you are working towards buying a new home, it is important to know what the market looks like. This will also help you to gauge when the best time for you to make a move will be and to get the most for your money.
Contact Your Agent
It is never too early to start building a relationship with your realtor or broker. Don’t be shy about asking questions. Even if you aren’t ready now, the knowledge will only benefit you when the time comes. Discuss what you are looking for – amenities, how many bedrooms, how many bathrooms, local schools, restaurants so that the realtor or broker can keep their eye out. Please feel free to contact me via email or through my contact page.
