Are you planning to buy a home but need help to save money for the down payment? Buying a home is an expensive affair. You need a significant amount of savings and a good amount of cash in hand. Doing all of this in just six months is a big task. But don’t worry, you’ve come to the right place! Follow this guide to learn how to save money for a house in 6 months.
How To Save Money For a House in 6 Months
There are many steps to learning how to save money for a house in 6 months. These include letting go of some of your indulgences. We know it is not easy to revamp your lifestyle and stick to a strategy that will improve your savings. This is where platforms like Beem come in. Beem offers the best financial guidance and helps you stick to your goals.
Taking things one step at a time and staying consistent goes a long way in helping you reach your goals.
Cut Expenses
Cut back on unnecessary expenses like extra Netflix subscriptions or gym memberships. Evaluate whether these are essential or if you can do without them. Plan a grocery budget and weekly menu to avoid overspending on unused items. Opt for second-hand items in furniture and clothes to cut costs further.
Set a Savings Goal
The price of the new house determines your home-buying goal. Setting a savings target becomes simple once you’ve figured out how much you need to spend. If you’ve secured a loan already, save on moving expenses, loan fees, and other costs. Without a loan, you’ll need to save more for the house. Regardless of your situation, aim for a goal above your budget to avoid feeling overwhelmed by expenses.
Evaluate Your Savings
After determining your monthly savings amount, assess how to transfer it to your downpayment account to avoid overspending and ensure your savings accumulate for your new home. Directly depositing money into your savings account prevents manual usage. Another good option is opening a high-yield savings account that gets you better returns than traditional ones.
Skip A Vacation
Skipping a vacation can help you save a lot of money that would otherwise be spent on holiday expenses. While skipping a vacation seems like a big decision when you have kids, it also costs thousands of dollars, including flights, hotels, activities, shopping, etc. Skipping a vacation just for a year might save you a lot of money for the new home.
Read Related Article: How to Save Money for Future.
Pick Up A Side Hustle
If cutting off on expenses and entertainment is still not enough to read your desired saving goal, consider getting a side hustle for extra income. Side hustles such as freelancing, writing blogs, driving for Uber, tutoring students, etc can help you gain some cash used for the savings of the new home.
Sell Unused Items
Consider selling items that are of no use and bring clutter to the house. Old clothes can be sold to thrift stores, useless toys can be old to newborns, and many other things in your home. Declutter, make a pile of useless things and sell them on the local marketplace or Facebook page. This will help you clean up your house and get some cash to save for the new home.
Pay Off Debt
Paying off high-interest debt is among the best ways to save money. This debt includes credit card debt, lines of credit, etc. The interest you pay on this debt is like throwing money away. So, by clearing your debt, you can save more money each month for a down payment on your home.
Collect Change
Collecting change might seem like a lot of thinking, but it adds up to significant savings if done consistently. Consider not buying that morning coffee and making one at home. Collecting leftover change in a jar will help you increase your monthly savings.
Negotiate a Raise at Work
Your ability to save is primarily dependent on your income. If you make $4,000 a month, you can only save $4,000. But if you make $8,000 a month, you can save twice as much. Ask for a raise at work. Talk to your manager about increasing your pay or getting a promotion. If you get a raise, put as much of it as possible towards saving for a down payment.
Ask For A Raise
Your savings are directly proportional to your earnings, so ask for a raise at your job. Talk to your manager and tell them about your savings problem. Even if the raise isn’t too much to your liking, you will at least have a little more income to transfer into the down payment.
Read Related Article: How To Save Money as a Stay-At-Home Mom.
Rent Out Your Spare Room, Car Or Parking Space
If you have an extra bedroom or unused car due to remote work, consider listing them on platforms like Airbnb and TURO to earn a steady monthly income. Be mindful of varying rental regulations across regions. Both platforms allow you to approve guests and dates in advance, ensuring convenience. This extra income can significantly boost your monthly savings for a down payment.
Check Your Credit Score
Checking your credit score helps you save money because it lets you know where you stand financially. A good credit score can help you get better interest rates and loan terms, saving you money on your mortgage when you buy a house.
Buy Only What You Can Afford
Buying items beyond your budget can impact your savings. Instead, opt for affordable and essential items that meet your needs. Avoid costly purchases and opt for cheaper or alternative versions. Buying beyond your means can hinder your ability to save for a down payment.
Get Rid Of Stuff You Don’t Need
Unused stuff is always lying around in the house. Sell it and make some money out of it. This will clean up the clutter and earn you some savings cash. Stuff like old electronic appliances, clothes, kitchenware, etc., can be helpful to someone else.
Don’t Eat Out
Avoid eating out on weekends and cook something healthy and cost-efficient at home. Eating out costs dollars, depending on the luxury of the restaurant. Instead, save the money for a down payment and enjoy some family time while staying home.
Read Related Article: How To Save Money For A Vacation In 6 Months.
Conclusion
Buying a new home in as little as six months requires a dependable financial strategy. Plan and budget how much you need for a down payment. When you have a clear picture of the decided savings and the cost of your house, including all the other expenses, making a down payment will seem more doable.
Whether you’ve been saving or are just starting, there are many ways to save for a down payment. Beem’s Better Financial Feed can help you overcome debt, spend, save, plan, and protect your money like an expert with on-point financial insight and recommendations. Make a household budget and find ways to reduce expenses or earn more money. That’s how you save money for a house in 6 months.
