How To Save Money On Your New Home
Essentially, there are only two ways to save for a big purchase: earn more or spend less. You may feel like those options just aren't possible, given the current demands on your time and finances. It should be no surprise that an adequate savings account will put you in the drivers seat when it comes to qualifying for a home loan. A good rule of thumb is to have at least 2 house payments in savings. It is not easy to save when times are tough. However, you really can save money when you put your mind to it and make it a regular habit.
Here are ten ways to save money toward an upcoming expense:
1. Put money into your savings account each and every month.
If you're trying to save up for a big purchase like a home, the first thing you need to do is set up a savings account through your regular bank. Then, ask them to withdraw money each month from your checking account and deposit it into your savings account. Having them do this automatically for you will help you save money simply by not having it in your checking account to spend. Lenders love to see at least two house payments in your checking or savings account.
2. Work overtime.
If you have the option to work additional hours, consider building enough overtime into your schedule to cover the item you want to purchase. Just remember to also consider the potential expense of additional child care while you're working.
3. Temporarily take on a second job.
This is another relatively easy way to earn additional money. Keep in mind that a "second job" doesn't have to mean that you'd be earning minimum wage pay, either. Take a skill you already possess and find a way to share it with others. For example, if you're a teacher, consider tutoring 1-2 hours per week. Additionally, you can earn money from home by babysitting for other people's children, pet sitting, or starting an on-the-side laundry business. Use your creativity and consider where the skills you already possess meet a need in your community.
4. Sell items through an online auction.
Take a good look around. What do you see that you don't use, need, or love? These may be items that could earn you some money on an auction site like eBay. Keep in mind, too, that the U.S. Postal Service will deliver Priority Mail boxes right to your house free of charge. You can then buy your postage online, print it out, and have your postal worker pick the package up right at your front door. This takes a lot of the "hassle" out of the idea of selling items online.
5. Cut back on your grocery bills.
Another quick way to save toward a big purchase is to spend less on non-fixed expenses, like groceries and eating out. Make an effort to plan your meals and look for recipes that are economical. Being intentional about how much money you spend per meal can help you save toward the big purchase you have in mind.
6. Use qualified Real Estate agents and Lending Professionals.
It shouldn’t be a surprise that buying your home will be the largest single purchase of your life. Do you trust that purchase to just any Realtor? No, you shouldn’t. You have found a qualified and reliable real estate professional here at kyleashworth.com. Do not hesitate to utilize this site and Kyle’s expertise to save you more money on your upcoming purchase.
7. Separate needs and wants.
Sometimes we have to reevaluate our expectations and purchase a less-expensive option that may not have all the "bells and whistles" we were looking for. To help you separate what you need from what you want, take a sheet of paper and divide it into two columns. On the left, write down the features your new home must include. Then, on the right, write down the features that you'd like to have. Then compare the results to the options that are in your price range.
8. Wait longer.
Sometimes you just have to wait a while longer before making your big purchase. For example, if you'd like a larger TV, and you're able to set aside $40 per month toward a new one, saving for an extra six months would give you an additional $240 to spend. In addition, if you're expecting a generous tax return in the next twelve months, waiting for it is another painless way to save for a big purchase.
9. Avoid using credit.
Using credit cards to purchase items you can't really afford to buy is like paying an extra 18-20%. Even if you think you're "saving money" by getting the item on sale, it ends up costing you more when you purchase on credit without having the ability to pay off the account balance at the end of the month. Credit cards can do more harm than good to your credit score. Remember this rule: If your available credit is more than half of your limit, then you are damaging your credit score. A lender does not want to see you haul around more debt than you can afford.
10. Reevaluate your current housing options.
In many cases it is cheaper to buy a home as opposed to renting. The rental market in many parts of the country (and especially here in Utah) has soared to record highs. In many areas you can save $600-$1000 per month by purchasing a home on your own. If you are stuck in this rental disaster it may be advantageous to leave the landlord now and start living the life of true home ownership.
Are you ready to make that step into homeownership?
Kyle Ashworth- 435-790-2544
Email- kyle@kyleashworth.com
You can also contact my lender Ben Kaufman by calling 1-866-373-4700 or by completing an application now.
