You may be at a crossroads right now and deciding where you will be moving next. At times this is exciting and for others, it may be a circumstance of necessity rather than desire. Although it may be out of necessity, there’s no reason you shouldn’t take advantage of the situation if you have enough of a notice to move.
If you are asking if you should rent or buy a home, you are probably in a position to ask yourself that. And by “in a position” I mean that you have the financial stability to research options other than renting. If you have any way of being able to prepare before you need to make this decision, here are some ways to save for your new purchase.
Even if you only have about 6 – 12 months to find a new home, you can at least budget what you’re currently spending. Cut back on eating out, clip coupons, shop for all the best deals. Even this tedious amount of savings could be beneficial. With creating a budget, no savings is too small.
Look at your 6-12 month trajectory and forecast what you should save each month to achieve your savings goal. Be reasonable and modest when it comes to this goal. You can’t expect to save 100k if you only make 110k. However, I hope if you’re making that much, you have enough sense to understand that.
Once you have your target savings goal, review your average monthly spending. This may be difficult if you spend from multiple accounts or use mostly cash. If you pay with cash consistently, you should keep track of your receipts or note them somewhere safe.
If you spend from multiple accounts there are apps you can download to track your spending from every bank account as long as you can sync with the app. Don’t make excuses, track your spending, and make the cuts where necessary if this money is essential to your home purchase.
This means to hustle as in work harder than you normally would. Pick up a part-time gig, or invest your money wisely to make quick earnings. Maybe your original job comes with bonuses or commissions for sales or other incentives. Take the overtime, take on more projects, do whatever you can to put extra money away.
You may have to get a bit creative. Of course, you make extra money by Ubering, but maybe you don’t have the means to do that. But everyone is good at something, so find out what you are good at. Do you have a passion for helping others? Maybe helping your elderly neighbor clean and grocery shop once a week can help you earn even an extra $10. You would be surprised at how quickly these little additions to your savings can inflate your nest egg.
Perhaps you have a passion for repairing things, woodworking, making buttons, really anything. Think about what you enjoy doing, how can you provide your services or products to others and make some money doing so?
The easiest way to make money is to make it passively. Well, this is the same concept for savings. Every time you get paid, have a percentage sent to a savings account. If you work in an unconventional way or cash, keep a jar or a box where you can stash your savings.
Additionally, always pay your bills straight from your bank account on automation. This is important because if you are not able to pay your current bills then you should not be saving to purchase a home. You need to make quite a bit more than your monthly expenses to be able to save for a purchase as large as a new home.
There isn’t an amount too small to save like mentioned above. Incorporating one or more of the tactics to save money that we went over will help you accomplish your financial preparedness. If you are successful with savings your first time around, you should consider purchasing more properties to flip.