7 Best Tips on How to Save Money for a House
Saving money is extremely difficult. Everybody knows that. Saving money is right up there with trimming that extra weight you’ve been talking about for the past few New Year resolutions.
If saving money for a house was easy, everybody in the United States would have a house. But it isn’t easy, especially since the housing market continues soaring past record heights.
With all that student loan debt (and maybe some credit card debt) to answer for, coupled with the want to travel and go out with friends, saving money for a house can seem like an impossibility.
After all, people tend to prioritize life at the moment rather than thinking about their future selves and saving for something that just isn’t quite in the grips of real-time. So these are the seven best tips when it comes to how to start saving for a house.
1. Make Yourself Saving Notes
Since people aren’t all that great about thinking of their future selves (especially when it comes to saving money for their future selves), jotting down notes and keeping them top of mind is extremely helpful to start establishing the saving habit.
You can jot down the note on sticky post-its and put them in your kitchen, bedroom and even in your car, or you can go new-school and keep the note in your phone. But you must force yourself to look at the note multiple times per day.
If you can do this successfully, you can change your spending and saving habits in about 21 days and be on your way to saving. This is probably the best way to save for a house because it changes your habits altogether rather than just cutting a few expenses here and there.
2. Cut Monthly Membership/Subscription Fees
Cutting monthly membership programs out of your life is one of the easiest and toughest things to do. It’s easy because all you need to do is make the decision to cut ties and you can usually cut the service via the internet or over the phone.
It can also be one of the toughest things to do because that service may seem necessary or may feel like it’s been a part of your life for quite some time.
Let’s take cable television or movie streaming as an example. If you pay $150 per month for cable, you’re one of the few who decided not to cut the cord and you’re drastically overpaying. Cutting cable (even if you keep Netflix) can save you about $130 per month (which is $1,560 per year). Cutting movie streaming services is another way on how to save for a house that’s a fraction of this cost as well.
Another monthly fee that can be cut is your gym subscription. If you’re paying $50 or more for a gym membership you only use a few times a week (or less) it may be time to search for a more affordable membership. There are plenty of gyms out there offering their service for $15 per month.
Hello, $35 per month (or $420 per year)!
Got an expensive phone bill? Consider cutting down your usage and lowering your plan with your current provider or consider switching to a new carrier entirely. They’re so competitive nowadays that you can get great service with most cell phone companies.
3. Eliminate the Luxuries of Life
Ok, I know I said the last one tips could be the toughest, but this one is right up there with it. Eliminating the luxuries of life can save you a boatload of money — and you can still have a blast doing so!
Try limiting yourself to going out, eating out or indulging a few days a week. If you cut this back to three days per week maximum, you’re already saving what you would be spending on the remaining days.
Let’s say you love Taco Tuesday and you need to go out Friday and Saturday night. Go for it, but don’t go out any other night of the week. If that’s not the right method for you, set a daily and weekly spending limit for yourself.
Try $150 per week. Once you hit that $150 threshold of spending (excluding the necessities like groceries, rent and electricity), don’t spend any more. You don’t have to spend money every time you go out. You’ll find the company you keep will often be enough.
If you can entirely cut eating out from your monthly budget, including bringing lunch to work and eating breakfast and dinner at home, you’ll be on your way to saving quickly!
4. Invest Unforeseen Money
Get a big raise or a bonus? Got a tax refund on the way? Get a lively chunk of change for the holidays? Don’t spend it. Invest it. Just think of that money as not even being your own. The minute you put it in your checking account, your mind will automatically look at it the same way as spending money.
5. Get a Side Gig
If you’re already working 40-plus hours per week, the last thing you probably want to do is get another job. But that’s the best way to save money. You can drive for a ride-sharing company, wait tables, deliver food or something else.
If you get a part-time side gig, you’ll be making more money and you’ll have less free time to spend that money. I know it doesn’t sound too fun, but hey, don’t you want to buy a house and quit paying rent month after month?
6. Open a Savings Account (With Another Bank)
When you’re contemplating how to save money for a house, you’re probably just thinking about the things you can spend less money on. You’re probably not thinking about tricking your brain into saving. But you should be.
Opening a savings account with a bank that isn’t your primary one of the best ways to save for a house. All you need to do is create an automatic payment from your main checking account into that savings account and that money will seemingly just appear there!
Since it’s in another account, you won’t see that savings amount every time you log in to your bank account on your computer or phone. Eventually, you’ll kinda just forget it’s there and then you’ll look in a year and be surprised at how much you’ve saved!
7. Move into a Cheaper Home
While this tip may technically be the most complicated on the list, it can yield the most savings per year for you. If you’re living by yourself in a one-bedroom or studio apartment, consider getting a roommate. You may be able to cut your monthly rent by nearly half just by sharing a space.
If you don’t know of anyone searching for a new place to call home, you can always check out apps or rental boards for a roommate. You can even move into someone’s home for a month or two via Airbnb to save some money.
Nowadays, there are plenty of ways to find a cheaper home instead of having to move back into your parents’ house to save a little dough. But, even if you want to do the latter, you’ll be surprised how much money you’ll be able to save in just a year.
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