If you’re following me on Instagram you have probably seen a few of my posts regarding our new home! My husband and I are building a home right outside of our hometown of Wilmington, NC and we couldn’t be more excited!
Any time you move, whether you’re purchasing or renting, you have to get real with yourself about your expenses. Everyone has something in their budget that they could do without and save even a little bit of money. Kaleb and I love to go out to dinners and travel, but have had to pull back quite a bit in order to save for our new home.
Saving money for your dream home is totally doable with a few smart strategies. There are a lot of valuable tips for saving money, but you need to choose the ones that work for you. Even if a money-saving tip is a good one, it may not be something you can do or would be comfortable with. Keeping these tips in mind, you can figure out how to budget for a house, and get there more quickly than you might think.
I firmly believe that you should go out and do the things you want to do while you can. We have only one life to live, why not attempt your wildest dreams? Maybe you’ve always been interested in living on the West Coast? Have you been online looking at houses for sale in Los Angeles? Or maybe you’re interested in a quieter pace somewhere out of the city limits? Do you dream of Appalachian mountain views or Gulf Coast sunsets ? No matter where your dream house is located, here are a few tips to help you save for it:
1. Set Up A Separate Account
Anytime you are trying to save money, it is best to put the funds in a separate bank account, preferably one at a completely separate bank. The reason being, you will be less tempted to pull funds for random emergencies, that aren’t really emergencies.
This is exactly what we did when we purchased our condo in 2016. While this particular property was my own investment, Kaleb and I paid all the bills together and in turn needed a resource to combined our funds. We have one joint account specifically for setting our money aside to pay our bills together.
When we decided to buy a new home (which turned into building a new home,) we began using this account to also save money together. The process has proven to be beneficial so far. We know our new mortgage is going to be more than our current, so we are using the time in between to save money and get used to the change in our finances.
Because we only use this account for our regular bills (the mortgage, utilities, car payment, etc.) we don’t have to worry about accidentally pulling from that account to fund nonessential.
Look for a bank that offers a good interest rate. When you are saving money to buy a house, you want your money inaccessible on a day to day basis, but at the time you don’t want it tied up in stocks that could lose value quickly.
2. Reduce Your Expenses
This is the most obvious tip, yet most people consider it the hardest! Including myself!
Reduce your expenses 10% across the board. That means if your grocery budget is $500 a month, try reducing it $50 for a total budget of $450. That’s not a huge difference, but the money will add up when you apply this technique to all your expenses. And soon enough you’ll have enough money saved for that down payment.
A good place to start is entertainment, specifically your streaming and subscription services. I know, I know, how do you choose which one stays and which one goes? The answer might be more simple than you think.
Think about what you actually use. For me and my husband, we use Netflix, HBO, and Hulu on a weekly basis. Those are our go-to streaming services. In addition to those services, we used to pay for Sling as well.
When we did a major cutback on all our streaming services, we determined that we didn’t use Sling nearly as much as we thought we did. It was also the most expensive of all of our streaming services. This service no longer fit into our lives and cost more than almost all of the other services combined so it was clearly the one that had to go.
I did the same thing with my various subscription services (which we’ll talk about later) and it saved us a significant amount of money. If you follow a similar procedure with all of your expenses, in due time, you will have enough money for a down payment on your dream house.
3. Cut Back Spending
Its not just those reoccurring expenses that zap up your excess funds. It’s no surprise, that little luxuries add up as well. So now’s the time to cut back on that daily cup of coffee and those pricey meals out.
This can be the most challenging part of saving money for a new home. This is where you really need to consider your lifestyle and what you can realistically do without. For Kaleb and I, it was going out to dinner. Kaleb and I love to go out to dinner and have fun date nights together. This was something we used to do quite frequently, until we decided to buy a home. We had to cut back to just going out on the weekends, and now we try to even limit that. Instead of going out to dinner, we cook at home which is better for you wallet and healthier overall!
Other little luxuries that are easy to temporarily put on hold include gym memberships, magazine subscriptions, expensive books, massages, manicures, meal delivery services, haircuts, clothes and any other expenses that go unnoticed most months.
4. Get A Side Gig
If changing up your lifestyle spending habits isn’t in the cards for you, you could try earning more money with a side gig. Save money faster by earning more cash.
A few examples of ways to earn extra income include selling the stuff that you already own. You could offer to sell other people’s junk, but it’s only fair that you give them a cut. Other ways, freelance writing, babysitting, dog walking, freelance photography, tutoring, or driving an Uber/Lyft.
My best advice for deciding what to pursue as your side gig is to consider the things you chose to do for fun. If you love animals, consider using apps like Rover or Wag! to earn a few extra bucks while hanging out with some adorable pups! If you love writing there are many freelance writing gigs that pay per word or page, depending on the specifications. There are all kinds of ways to earn a little extra on the side that don’t require you to leave the comfort of your own home! A quick Google search can help you find the best side gig for your personal preferences.
5. Cancel Memberships
Clearly this is a really important aspect of saving money because this is the second time I’m bringing it up in this post!
Memberships and subscription services are a huge part of the modern American’s budget. Almost everyone uses some sort of subscription service, whether its Amazon Prime, Chewy, or Hello Fresh. These fun and useful services can add up and increase ones budget without you even realizing it!
When it comes to subscriptions like gym memberships, you don’t need to splurge to get in a workout. There are inexpensive options like Planet Fitness, where memberships cost just $10. If you haven’t found yourself in the gym for months, maybe consider canceling it all together. It’ll save you some money and remove the guilt factor. If you’re subscribed to a magazine but don’t read it very often, cancel it. If you’ve got a membership to a wholesale club but haven’t been in two years, cut up the card.
If you still use your subscription service form time to time and aren’t ready to cut ties with it completely, consider skipping a month. Most monthly services will give you an option to skip a month or put your account on hold. This can be a great option if you know you’ll want to use it again, but need a short break.
Those are my tips for ya! If you have anything to add I would love to hear down in the comments. Let me know what you do to save money!