Are you trying to save money for your first home? What about pay off the dream house you just bought?
You may be searching for quick and easy ways to save for it, but have come to the conclusion that there is no easy way. After all, saving money for a purchase of this size requires hard work and dedication.
These 4 tips will help you become the official owner of that home you’ve been eyeing.
1. Refinance Your Mortgage
If you’re currently a homeowner, you can research mortgage refinance options. This may help you save money for the house you have your eyes set on.
Mortgage refinancing redefines the terms of your loan. It creates a new plan that will lower interest rates which means you’ll have more money left at the end of the month. And, guess what? You can throw this extra money into your dream house savings fund!
This option is great for anyone with a mortgage loan that’s in good standing, qualifying credit score, and moderate debt-to-income ratio.
2. Create a Savings Account
Creating a savings account is only half the battle. From here, you need to plan on how much you can save every month. And, if we know one thing for sure – a plan without action won’t give us results.
Looking for accounts that are considered high-yield can help you earn and save at the same time. Known as high Annual Percentage Yields (APY), these types of savings accounts compound their interest daily, meaning you are earning more interest than you would with an account with a low APY.
The more money that is in your account, the more money you will get back due to the high-interest rate. Putting a regular amount of cash in your savings account consistently will ensure that you reach your goals in a timely manner.
3. Cut Back on Your Spending
If you’re looking to save extra cash, it’s good to cut back on frivolous spending. In 2020, an average of $2,912 was spent on entertainment, which includes streaming services such as Netflix or Hulu. Cutting back on services that cost money can help you save a lot, especially when there are free services that do the same thing.
Cutting back also includes not eating out as much. How much do spend weekly dining out? Consider cooking your own food or packing lunch for work. While this will take up more of your time, you’re eating healthier and saving for your goal.
Got some extra cash on the side? If you’re feeling daring, investing in stocks or index funds may be your next course of action.
Investing is a more active way to let your money grow albeit being the least secure. When investing in stocks, the idea is to buy for the lowest amount and then sell for the highest amount. The problem with this idea is when you should sell – you don’t know if the stocks you buy will be less than what you bought them for, thus making you lose money.
If investing sounds good to you, doing research on investments before putting money down can be extremely beneficial. The rewards of this method can be enticing, but keep in mind it’s very risky.
Start Making and Saving Money
With these four tips, buying and becoming the official owner of your dream house will be much easier. It will still take time to earn that money, but you will accomplish that goal faster than those with no plan in place
Disclaimer: MoneyMagpie is not a licensed financial advisor and therefore information found here including opinions, commentary, suggestions or strategies are for informational, entertainment or educational purposes only. This should not be considered as financial advice. Anyone thinking of investing should conduct their own due diligence.