How difficult it is to buy a house, right? A few years ago, in the real estate bubble, the houses were at prohibitive prices and now that they have gone down (although not equally in all areas) the banks do not give mortgages. So how to save for a house?
It is really complicated in today’s world to own a home. There are many expenses and income cannot cover everything. However, as with everything, it has a solution.
In today’s article I want to see a series of tips that, I think, will be useful if you want to buy a house or plan to do so in the coming months or years .
There are the typical tips on how much to ask for a mortgage, how to negotiate, how much money you have to have saved, etc. About this there is already a lot of information and very good by the way .
In this article I want to look at this problem and give a series of different tips. At least that is my intention and you will tell me if I have achieved it or not in the comments.
How to Save Money to Buy a House
Here we are going to see an action plan composed of a series of steps focused on buying a home without ruining the process.
Get more from yourself
Leave your ego at the door. Fact? All right. This may seem somewhat arrogant advice but it is the truth. If you really want to buy a home you will have to do things that you may not even consider right now .
Make important sacrifices such as stop buying that gadget that you ” need ” so much or maybe spend a couple of years without going on vacation beyond visiting relatives. Not forgetting that beers with friends for a while will be a thing of the past. Or roll up your sleeves and start putting your finances in order. See what you spend more on and where you can trim to the last cent.
You have to abandon your preconceived ideas at the door and don’t just say ” No, no, that doesn’t work for me ” unless you have tried seriously.
Find the cheapest accommodation you can stand
Getting to save to buy a home means living during that period of time in a cheap place . A place where you are comfortable, have a minimum of habitability but in no case luxuries. Are you saving to buy a home remember?
Perhaps your first reaction when the house where you are going to live for a few months or years is ” Here I do not live or die ” but, as I said before, you will have to make sacrifices and have an open mind.
If you live in a more expensive place, it will take longer to save the money you need and you will enjoy your home for less time .
Learn and practice saving in all dimensions of your life
You may think that it is nonsense to spend time doing something that will only save you one or a couple of euros but if you do it in everything you will see how, little by little, money is accumulating and you save more and more.
Try to always use public transport instead of the car. Do not leave electrical appliances on standby. Change the bulbs to low energy ones. Find free leisure and fun ways. Don’t stop drinking coffee going to work, better at home. Do not buy books, use your library.
Build an emergency fund
The emergency fund is here, a classic. And it is that an emergency fund can help you a lot to buy the house you want.
Dedicating a portion of your savings to creating an emergency fund, even for a couple of months, and depositing it in a savings account, will mean that if something bad happens you don’t have to throw out a credit card or have to ask for a credit. And this will cause you to lose a lot of ground, maybe in a definitive way.
Once you have your emergency fund of 2-3 months of expenses, leave it in the savings account or in the fixed-term deposit and see how interest accrues.
Build this emergency fund before doing anything else and if you need to use it, make sure you leave it as it is before continuing.
Pay all your debts before
Paying for housing is going to be a huge monster so you need to get rid of all your previous debts so you can focus on this great debt that lies ahead.
Nowadays the banks have raised the requirements to grant a mortgage a lot, so if you go with debts it is difficult for them to give it to you. But maybe the bank clerk tells you that because you don’t put the debt into the mortgage.
It may seem like a good idea but you will only get more long-term debt and pay a higher amount of interest. Do not run, if you do things right you will achieve your goal without needing to borrow more.
Focus on your goal
Without debt, with a cheap lifestyle and an emergency fund created , it’s time to focus on saving to buy your home.
Find the house where you want to live, see how much it costs and decide when you want to buy it. Now you just have to divide what the house costs between the months and save each month, without exception, the result.
Accumulate the money and leave it in a savings account or in a fixed term deposit so that the interests shorten the waiting time and help you.
This tip may be the most important. Saving to buy a house requires time and sacrifice so any help is little . Above all psychological.
Put the photo of the house you want to buy in visible places, which serve as a reminder and motivation. You can also use a progress bar that you will cross out or color as you get closer to your goal. Or whatever else you can think of.
Following these steps you can buy the house you want. It is not easy clear but with patience, perseverance and a good roadmap is possible.