Savings Strategies Every First-Time Homebuyer Needs To Know

If homeownership is one of your long-term goals, you're probably working on your savings. A major priority is to ensure that you have a plan in place for closing costs, down payment, and other expenses.

Here are some strategies to help speed up the process.

Budget and Track Your Expenses: Begin by creating a detailed budget that tracks the money you receive and the money you spend. This will help you gain a better understanding of your overall finances.

Reduce Unnecessary Spending: Now that you've completed your budget sheet and understand how you're spending your money, look for any line items that aren't absolutely essential. If you cut back on those, you'll be able to put more money toward buying a home. Even small things can add up. The National Association of Realtors (NAR) says:

“The majority of first-time buyers did make financial sacrifices to purchase a home. For those who did, the most common sacrifices buyers reported were cutting spending on luxury goods, entertainment, and clothes.”

Automate Your Savings: Once you've determined how much you want to set aside for your home purchase budget, look for ways to make it easier. If you have to transfer funds manually, you may forget to do so. However, setting up automatic transfers helps to maintain consistency and eliminates the temptation to spend it elsewhere. Realtor.com explains:

“If you’re struggling to put enough money away because of the constant temptations to blow your paycheck, consider automating the process. Ask your employer if you can have your paycheck deposited into multiple accounts—if so, instruct it to send a certain percentage of your salary directly into your savings account. Or go through your bank . . .”

Lean into Any Side Hustles You Have: Do you have a gig that you do (or have done in the past) to supplement your income? Taking on part-time work, freelance jobs, or starting a side hustle can help boost your savings.

Put any unexpected cash to good use: If you receive a tax refund, bonus, inheritance, or cash gift from family, put it toward your home fund.

By following these strategies and focusing on your savings over time, you can ensure that you have enough money to buy your first home. As Ramsey Solutions states:

“Budgeting shows your money who’s in charge (that’s you). It gives you the power to tell your money where to go instead of having to wonder where it went. It’s how you make any money goals happen—like saving for a down payment.”

Bottom line.

If you need more tips for getting ready to buy, let's talk.

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