For many people, owning your own home is a lifetime dream come true. And why not? Living in your own house beats giving money to the landlord any day. In fact, paying rent in most cases equals to paying someone else’s mortgage.
Unfortunately, house prices keep skyrocketing and so this dream remains just that for the majority. But is it really achievable?
I believe it is.
It can be difficult if you do not have a well laid down plan. You need to create one and stick to it to the letter and if possible exceed your own expectations.
In this article, I’ve tried to come up with a few pointers on what you can do to achieve the dream of owning your own home. You might have a different game plan and that’s alright.
Whatever the case I would highly suggest you write it down so that there is a clear picture of your vision, set goals and build on the methods.
Get a fixed deposit savings account
This, of course, should be your first step.
It is important to automate the saving process so that money is transferred to that account as soon as it’s available. It is the safest way to do this. Just make sure its set up in such a way that makes it almost impossible to just withdraw money at will.
Talk to a financial advisor.
Don’t go to your friends for financial advice as some people do. Financial advisors can work a reasonable budget plan for you as you pursue your dream of owning your own home. Don’t assume you know everything. There might be loopholes that you can exploit that can help you get your home sooner rather than later.
Calculate your expenditure accurately
This means that you have to put in every coin that does not get to your savings account as you spend it on things like food, bills, electronics, trips, rent and typically any other spending you do through your month.
If you do not have a fixed amount for food, put in an estimate of what you usually spend in a month. This includes the pizza days and cakes you order once in a while. Give an accurate estimate.
When you are done arranging these expenses, add them. This excludes the automated deduction from your money to pay your loans or other recurring expenses. This is not usually part of your income.
Notice that these loans make your net income thin yet you still find a way of having a lot of expenditure in your hands. Our aim is to focus some of the unnecessary ones to the savings account.
This is where you start shifting things to work for you. Take a look at your expenditure. On a separate page, write down what you may not find necessary until you have saved enough money.
You can always provide yourself an emergency option for any expense that may come up which you deemed unnecessary. It, however, has to be less than the amount that you are used to spending. Subtract all these unnecessary amounts and put the figure at the top of your savings page.
Your electricity and water bills also ought to be minimized. If you can do this it would be for your own advantage.
Your budget has to have less expenditure by the time you are done with it and you ought to have a good looking stable piece of your income now directed to the savings account.
The one reason people don’t usually get to have the houses of their dreams is that they are too busy spending their money on the rent that is totally changeable. Do you know that there is little difference between rent and mortgage repayments?
Well, this has to change if you are serious about getting your new house. Often, we have to make down payments for houses which are usually the most difficult part of getting the house.
The down payment is usually anywhere between 10 and 20% of the total. The rest is spread over a period of time so that you are able to call it your own. This is the best way to go. In order to make that first payment, it’s important to reduce your rent.
You can choose to move out or become a landlord yourself by getting a roommate with whom your rent will become reduced.
If you are single you can move to a small apartment or move to your family home and help out with other expenses as you build up your savings.
Always make sure you end up with a good amount of your rent money in your savings plan. Just don’t overstay your welcome:) The last thing you want to do is make folks uncomfortable.
Now I know most of the people start by setting the time you need but this cannot be accurately done without the digits. You have your savings account, it is ready to receive the money you need, you have the estimate of what you have ready for you and now set the time.
This will help you sort out any issues with the dealer as well so that it is easier to know how much more time you need to complete payment.
This time setting only includes the stable income you will use to save the amount you need.
Assets and liabilities
Many people tend to look at houses or even cars as assets. However, these are liabilities. They become assets once you have cleared the repayments.
Assets are what increase your value while liabilities potentially subtract what you are worth at the moment. Find a way of maximizing earnings from your assets. This could include any properties you own. Find those that you can make use of that will not put a dent in your extra earnings and sell them.
I once sold my truck which as a liability at the time I wanted money because it consumed much but was worth something. It gets you closer to your goals or even doubles the time you had estimated. It feels good to reduce the liabilities as well as make good use of your assets.
Make sure to do all the smart things necessary to also reduce your debts. Debt reduction will greatly impact your flow of income for your house.
liabilities that are not really changeable should not be a cause of worry. You could always work best with what you have.
You should be in a position to tell what time you should be moving into your new house if you have the right plan of action. You will be surprised at the amount of money you can generate when you have an urgent need of it. Make your life flexible so that you are able to achieve your desired goal tomorrow. It is worth it!
Investing in property is a great way to achieve financial freedom. Once you get your first home, don’t stop there. Think of investing in other properties. It’s hard to go wrong in the property market. Your home could be worth 2 times whats its worth today in 10 years.
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Many thanks for reading my post. If you have a question or a comment on how to save money for a house, please leave it below. I would love to hear from you.
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