While many people dream of owning a home someday, the prospect of saving the sums of money needed to realize that dream is daunting. It’s true – saving for a home might be one of the hardest things anyone has to do, particularly if you’re not as skilled with money management as you might like to be. If you’re not sure how to save for a home, these three steps may be a good starting point to making your dream of home ownership a reality.
Step 1: Track your Current Spending
Tracking your spending allows you to make a monthly budget which will allow you to save for your dream home. The best way to do this is by categorizing your expenses every month. How much money are you spending on dining out? How much is going to your current rent or mortgage? How much is left over every month? You can keep track of these expenses by hand or by using one of the many budgeting apps available online.
Step 2: Make a Savings Goal
Making a savings goal is done in two parts. First, an ideal monthly savings target is calculated based on the amount of money already saved, how much money is left to be saved in the future, and how much time it should take to save it. Second, look at the amount of money left in your monthly budget after all expenses are paid. If this amount is more than your ideal monthly savings target, you can begin saving for your home right away! If it is less, consider adjusting the timetable to homeownership if you are able. If delaying your plans isn’t in the cards, you will have to adjust your monthly expenses to get to your monthly savings target.
Step 3: Finding Ways to Reduce Expenses
Though most people think of cutting a run to the coffee shop every week or packing their lunch to work when they think of cutting expenses, often these contribute very little towards savings plans. The best way to approach cost-cutting is to look at your largest expenses – particularly, your household and transportation expenses. Consider, if you are able, renting a cheaper apartment temporarily to funnel that monthly savings towards your target. If you live in a two-car household, you can save a lot of money on vehicle upkeep by eliminating one of these cars, and this could be a workable option.
Buying Your Home With Clagett Enterprises
Clagett Enterprises is a full-service real estate company with almost 30 years of experience in the Frederick and Western Maryland area. For assistance selling your home and getting the best possible price, contact us online or give us a call at 301-665-6009. To meet our team and see some of our beautiful homes, follow us on Facebook, Twitter, Pinterest, and Google+.