Dream of buying your own home but don’t know where to start? Check out these tips to help you take the plunge (quite literally if you find a place with a pool!).
Get to know your money
It’s time to pull up the calculator on your phone and get serious about your income. Review your pay stubs, your savings and checking accounts, and count the secret stash of cash you have hidden in the … well, never mind. You know where it is. Figure out how much income you have.
The next step is to add up all of your expenses. As you do, make two columns — one for necessary expenses and one for nonessential ones. We’ll come back to this later.
Start a “Future Home” savings account
If you want to save for something as major as a house, you need a dedicated savings account that you won’t touch. It’s too tempting to use money set aside in your regular account. To truly put the money aside, set up a specific amount from your paycheck to direct deposit into your new “Future Home” account and forget about it.
Tighten your belt, cut corners, and pinch your pennies
If you want that dream house, it’s time to get serious about saving. That means you’re going to have to cut back on nonessentials. This may mean you make your coffee at home instead of grabbing some on your way to the office. Think about it, if you’re spending, say, $2.45 a day on coffee, you could save $588 in a year (based on a regular cup of coffee five times a week for a year).
Moving.com suggests cutting back or giving up “‘little’ luxuries” like “pricey meals out, cable TV, massages, manicures,” etc. Maybe you have subscriptions to more than one streaming site. You could drop one (or two). Drop Hulu and keep Netflix, then do the reverse in a few months. Take some time off from your gym membership, and take your workout somewhere else.
Pay off existing debt
And lay off the credit cards. When you can eliminate your debt, you’ll have more money to sock away. Plus, you won’t be paying interest every month on those cards. Getting rid of any monthly payments you have will make a huge difference.
To learn about the expenses that go along with buying a house, EveryDollar.com has a great article that will help you figure out how much money you’ll need for things like the down payment, appraisals, and closing costs.
If you’d like more information on the San Fernando Valley or Los Angeles, or to have help looking for your next home, please feel free to reach out! I’m happy to help, no obligation.