If the thought of saving money to buy your first home seems overwhelming, read on. We’ve got some ideas for ways you can save money for your first home purchase.
The following post is by MPFJ staff writer, Laurie Blank. Laurie is a wife, mother to 4 and homesteader who blogs about personal finance, self-sufficiency and life in general over at The Frugal Farmer. Part witty, part introspective and part silly, her goal in blogging is to help others find their way to financial freedom and to a simpler, more peaceful life.
Saving up to make your first home purchase can seem overwhelming. It’s not uncommon to need $10,000 or more in cash when you buy your first home.
Typically, as a buyer, you’ll need at least $1,500 toward the down payment in the form of earnest money when they make an offer. At closing, your down payment often needs to be a minimum of three percent of the purchase price.
In addition, you’ll need money to pay for closing costs, property taxes, homeowners insurance and more.
If the thought of saving money to buy your first home seems overwhelming, read on. We’ve got some ideas for ways you can save money for your first home purchase.
How to Save Money to Buy Your First Home
Luckily, there are many ways you can save money to buy your first home. Use one or more of these options to save money quickly and get on the road to being a homeowner.
1. Sell Your Stuff
Most everyone can go through their closets, drawers and storage areas to find items they no longer need or want. Do this for yourself and gather up unwanted/unneeded items.
Sell them via a garage sale, Facebook Marketplace or Craigslist. Use the “If I haven’t used it in the past year, it goes” rule when you’re on the fence about what to sell. It’ll be worth getting rid of stuff when you’re unpacking boxes in your new home.
2. Get a Side Hustle
A side hustle is an extra source of income to cover expenses – or in this case, help you save for a house. There are many different side hustle options for gaining you additional income. Here are some ideas:
- Use your skills to start a freelancing business
- Get a second job in retail, restaurant work or service
- Work for a rideshare company like Uber or Lyft
- Start a service business such as babysitting, pet-sitting or lawn mowing
Commit to putting all extra cash earned from your side hustle into a savings account designated for your home purchase savings.
3. Budget Like a Rockstar
Another way to find money to save is to get on a super strict budget. Some people call this a Challenge Everything Budget.
First, if you’re not budgeting, start. Write down a list of every expense you have, and see how much extra money should be left over. Avoid nickel and diming that money away on casual expenses and put it right into savings on payday instead.
Next, go through every single line item on your budget. Find a way to reduce or eliminate that expense. For instance, you could cancel cable TV and gym memberships.
Or, you could call around for lower car insurance rates. Another idea would be to commit to not going out to eat or spending other money on entertainment for a time.
Instead, have gatherings that are free, such as game nights, hikes in local parks, etc. Put all extra money into savings.
4. Save Unexpected Money
Another idea for saving money is to commit to putting any unexpected money into savings. Some examples of unexpected money include:
- Tax returns
- Bonuses, raises or overtime money from work
- Birthday and Christmas gifts of cash
- Money you get from returning items you’ve purchased
Anytime you find yourself with extra, unexpected cash, just put it right into your house savings account.
5. Treat Your Savings Like a Bill
Finally, save money for your house by treating your savings like a bill. Using your budget, figure out a target dollar amount you know you can save while still having enough cash for regular expenses.
Set up an auto-deposit into your savings account, either from your checking account or directly from your paycheck.
By treating your savings money like a bill, you’ll adopt a “set it and forget it” mindset and save money in no time. Open a high-yield savings account to give your savings an extra income boost.
Summary
Saving money for a house might seem like too big a job, but with a little work here and there, you can get it done!
***Photo courtesy of https://www.flickr.com/photos/jdhancock/8609444344/in/
