Buying a home is exciting… but it can also be expensive! Even without a 20% down payment, you’re still looking at several thousands of dollars in closing costs, plus you’ll probably want to make a few updates (like new furniture or decor) once you move in. If you want to buy a home in 2020, now’s the time to start saving!
Here are some money-saving strategies for the new year.
Track your spending.
One of the simplest ways to save is to first understand what you’re spending. Those little costs here and there add up, but you might not even be aware of it if you’re not paying attention. Drawing awareness to how quickly going out for lunch adds up might make think twice about it next time!
Set a budget.
Once you know where your money’s going, curb the excess with a budget! If you have trouble with sticking to designated spending allowances, try a cash-only method for non-essentials; take out your set amount of cash, and once it’s gone, you’re done spending!
Pay off debts with the “snowball method”.
Paying off debt can seem overwhelming, especially if you’ve got a lot of it. Start by simply listing out your debts in order from lowest to highest. Then, pay them off in that order; the lowest debt will be paid off first while the rest get minimum payments each month.
Once your lowest debt is paid off, take that same amount of money you were spending on that low payment and push it to the next one. Once that’s paid off, move on. Before you know it, you’ll have shortened your list—without feeling like you spent a ton of money.
Set up a recurring transfer.
One of the easiest ways to keep money flowing into your savings account is to set up a recurring payment. Figure out how much you can comfortably put into your account each month, then have the money automatically moved over. This way, your savings account comes first and is guaranteed to grow.
Aim for 10%.
Not sure how much you should be saving? A good rule of thumb is to aim to put 10% of your income aside. If that’s not quite doable, that’s fine, but it’s a good number to aim for, if you can figure out a way to cut down on some spending. If you want to save more than that, even better.
Spending money is inevitable. But there are ways to spend that will encourage you to spend less, thus leading to more savings in the long run. For example, you could try using the 24-hour rule—that is, for any nonessential item you buy, wait 24 hours before purchasing to see if you still want it. You could also try matching your spending with an equal transfer into your savings account.
For essential items, shopping sales or using coupons can lead to big savings, but it’s important to be sure you’re not simply buying these items because they’re on sale.
Ready to Buy a Home in 2020?
Are ready to make 2020 the year you finally buy a home in Tampa Bay? Tomlin St Cyr is here to help! Contact us today to learn more about how we can help you find the perfect home in just the right spot.