1. Clear Your Debts
Before you start saving for something as big as a house, you should first clear all your debts. Get rid of your student loan first and then start saving for a house. The reason you should do this is because it is easier to save for one thing at a time. Even if you earn enough to save for both, don’t do that. Save twice the amount, pay off your student debt quicker and then start saving for your house.
2. Pay to Your Savings Fund First
Whether you are saving in a piggy bank or have a savings account, you should always set aside an intended amount first. Don’t be led astray by reasoning such as: “I’ll save whatever’s left at the end of the month”. You won’t really save much like this. See how much you can take from your paycheck every month and as soon as you get your pay check take that money and put it in savings.
You can ask your bank to pull, for example, 10% from your paycheck every month and put it on your savings account. It is easier not to spend money if it was not available for spending in the first place. This way the same amount of money will be put on your savings account no matter what and you won’t be tempted to spend it on something else.
3. Don’t Buy Your House too Soon
We all want that moment when we have our own home to come as soon as possible but sometimes it’s better to wait a little. Don’t buy a house as soon as you get out of college and get your first job. You’ll probably still be in debt and you will probably make more money in the future.
The more you earn, the easier it will be for you to save. Furthermore, it is more likely that your bank will approve a loan if you are debt free and earn more. This doesn’t mean that you should not save before you decide to buy; you should just wait until the time is right to make big financial decisions.
4. Keep a Record of Your Expenses
It’s best to keep a meticulous record of your monthly spendings, you can use a program such as Microsoft Excell to assit you in making an easy to follow chart of your monthly income and expenditures. You can do this in a simple notebook too, whatever works better for you. The point is to keep track of where your money went because that’s how you’ll know where you can save.
Prevent those moments when you open your wallet and ask yourself: “Where the hell is my money?” it’s all gone but you know you haven’t been robbed. We spend a lot of money every month on small things we don’t even record buying. To prevent this, keep a clean record of all the money you spend and everything you spend it on.
5. No Credit Cards
One very good idea, when it comes to saving money for anything, is to stop using credit cards. You tend to spend more money when you are not giving it right away. Don’t even carry checks with you, just cash. Paying with cash will give you a better insight in how much you spend and you’ll be able to cut your expenses more efficiently.
If you think you’ll be too tempted, cancel your credit cards all together or, at least, don’t carry them with you. Keep them at home only for emergency situations and no, buying a new pair of shoes is not an emergency situation.
Saving money for a house is a big and responsible decision. As soon as you make it, make a promise to yourself that you will stick to it and do everything you can to succeed. If you really put yourself up to it, you can do it.
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