How to Save for a House: 7 Tips for Saving for a Down Payment

National Homeowners Day is December 26th, so it’s a good time to go over some tips to help you save up for a new home. Whether you’re a renter looking to buy your first house or a seasoned homeowner looking to save up for your dream place, these tips will help you stay on track to reach your goals. Exactly how much to save varies depending on the situation, but it’s always a good idea to save enough to cover closing costs, moving expenses and a down payment. 

7 Tips To Save For A New Home

1. Budget Better
Saving for a new home starts with budgeting. It’s important to know how much you’re bringing in, how much you’re spending and what you’re spending it on. Then, you can figure out simple ways to save a little here and there every week. This may take a little effort upfront, but it will pay off in the long run. Apps are even available that make it easier. But if you want a personal touch, talking with a trusted financial advisor at The Southern Bank could help you in the process. 

2. Kick Your Bad Habits
A good way to save up is by cutting back on bad habits and unnecessary purchases. Reducing just one bad habit could save hundreds of dollars a year. If you’re spending a bunch of money each month on dining out and delivery services, cook more meals at home and limit the amount you dine out and see how much you save. Cutting down on late-night online shopping binges and impulse in-person buys could have a major impact on your budget as well. Maybe you’ve been wanting to quit smoking or cut back on your happy hours? Little things like that will add up for your health and your savings. Take all the money you save from cutting out your bad habits and put it toward your new home and you will be well on your way to your goals.

3. Upgrade Your Employment Situation
Asking for a raise or changing jobs can be difficult, stressful situations, but it could be an important step toward saving up for your home. When asking for a raise, it’s important you come prepared and be ready to prove how valuable an employee you are. Knowing when to ask is another important key. Don’t ask during hectic times or tight project deadlines. Schedule a meeting for a down time and go in with confidence. Even if you like what you do and where you work, sometimes you have to move on to move up. You might not be able to find a better position right away, but it doesn’t hurt to browse job openings and send out resumes just in case. The transition to a new job isn’t always easy, but it could be worth it to explore your options if you’re serious about saving up for a new home.  

4. Earn Some Extra On The Side
If your schedule allows, you could consider picking up a side hustle working a part-time gig during nights and weekends. Various opportunities are available from pet-sitting to testing new apps. Ridesharing and food delivery services are becoming more prevalent, and freelance opportunities can be found with just a click. You can even rent out your spare room or parking space. The key is finding something that doesn’t interfere with your normal job. Any little bit helps to supplement your income and make it easier to save up.

5. Hold Off On That Vacation  
Whether it’s a summer beach getaway or a big ski trip, everyone loves a good vacation. But they can be pretty expensive. In fact, the average family of four spends $4,500 on vacation. If you really want to save up for your new home, try postponing any big trips you have planned for a year or two. In the meantime, you can still find ways to relax and make memories without breaking the bank. Whether it’s taking a cooking class, spending a day at the museum, having a staycation in your own city, or exploring historic and natural landmarks in your area — just because you’re not on vacation doesn’t mean you can’t have fun.  

6. Save Automatically
Sometimes it’s easiest to save if you don’t even know you’re doing it. By automating your savings, you can build up your savings account without having to do much of anything. Contact The Southern Bank to help you set up an automatic withdrawal from your primary account into your savings account. This can be helpful for people who have trouble managing money or are prone to impulse buys. Because when it’s not in your checking account to spend, you’re less apt to spend it. Remember to schedule your automatic withdrawal on paydays, so you can always ensure there’s enough money in your account to protect you from overdraft fees.

7. Live Smaller To Save Bigger
If you want to save a considerable amount of money fast, you might want to consider downsizing. It’s a quick way to save more money toward a down payment on a new home. Downsizing is the process of reducing your expenses and living below your means while you save. When you downsize, you only spend money on necessary expenses and put the rest of the money away in savings. This might include moving into a smaller apartment, selling one of your family’s extra vehicles or moving to a more affordable area. You might also consider having a roommate move in to split the rent. Downsizing means a little something different to everyone. 

Whether you’ve been saving for months or you’re just starting your savings journey, these tips should help you get there a little faster. If you’ve been saving and are ready to take the next step, contact a mortgage specialist from The Southern Bank to get the application process started today. 

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