How to Save Money for a Home Purchase?

Saving up enough money to buy the dreams of your home might seem impossible, but that is not the case. By making a solid saving plan, anyone can save enough money to complete their down payments to buy their dream home. What’s more? You might be an arm’s reach from having the required amount without actually realizing it. But if you are not, we have come up with the tried and tested methods to save money for buying your dream home. Keep reading to satisfy your intellect.

Better budget – The foremost step to saving money is to create a budget. If you are unaware of where you spend your money every month, you will be unable to meet your demands of completing the down payment. Track how much income you are bringing home every month, and include the income of your spouse, too, if they contribute to the down payment. Now, take a look at your bank statement and credit card payments to see where you spend the most.

Make a list of the areas where you can cut back your expenses, and you will be good to go. Take into account the necessary expenditure like loans and utilities, non-essential expenses like cinema, restaurants, etc. If you find it difficult to do it all by yourself, you can take the assistance of a budgeting application. Or, taking the help of a financial advisor can also serve your purpose.

Monetize your assets – Buying a home is not possible in a year or a few months. You should start saving and planning for it prior to 3-4 years of buying. You can explore the options of monetizing your assets. For instance – You can liquidate an FD or make borrowing against a fixed deposit if you have better financial conditions. In addition, you can also request your company for a partial withdrawal from your EPF, that is the employee benefit plan. Steer clear of taking personal loans and credit cards due to their high-interest rates. If you do, you might experience a long-term debt burden.

Ask for a raise – Do you feel that you are left with little money every month after you receive your salary? No wonder there is time for a raise. But you can follow the given methods to increase your chances of receiving an increment –

  • Come prepared – Always come prepared for salary discussions. Collect the data and results that you have delivered to your company. Tell them you have been busy working on those projects. It will make your manager realize that you are a great asset to the company, and they cannot afford to lose you.
  • Keep your tone confident but grateful – Your attitude is as important as the things you are saying. It is good to be confident in asking what you want but also be grateful and enthusiastic. Show your manager that you want to grow in this company and are keen to handle more responsibilities.

Side-hustle – As the “gig economy” is getting popular in the current world, it is easy than ever before to earn some extra money with the help of a side hustle. What you can do is –

  • Freelancing work – Working for yourself is what defines freelancing in short. It gives you the ease to work for clients from the comfort of your home. You can get a good amount for your skills of writing, photography, artist or musician and put some extra money in your pocket.
  • Test applications and websites – Many companies nowadays are in constant search of users to test out their applications or websites to ensure their user-friendliness. You can sign up with the testing company and get some money after sharing the feedback.

Automating your savings – If you are someone who comes in the category of an impulsive shopper, automating your savings is the best choice that you can opt for. Let’s see how it works.

Decide the amount you want to save every month to pay your installments. Get in touch with your bank and tell them to authorize an automatic withdrawal from your primary account into a separate savings account. Your concerned bank will automatically take out money from your bank account every month and deposit it in a separate account. It is useful for people who find it challenging to manage their money. Making your money less accessible tempts you to buy unnecessary things. Keep in mind to schedule your withdrawal on the day your salary comes or when you are sure that you will have enough money. Overdraft fees can create serious difficulties in paying back the down payment.

To make a long story short.

If you have not started saving for your house, it is high time to do so. Follow the above-mentioned methods and get the money you want. Make a budget, choose a side hustle, downsize, rent an extra room, and the list goes on, which helps you to save money. Research well and select the method that matches your emotional needs, preferences, and, ultimately, your financial situation. Your dream home is not far if you kick-start the process of saving and investing.

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