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Budgeting for a House: Important Tips to Help You Save

You have it all picked out in your mind. It’s your dream home! But with everything else to do in your life, how do you go about budgeting for a house?

Should you just start feeding a piggy bank like you did when you were a kid? Or is there a better way to do it?

There are much better ways of budgeting for homeowners’ expenses than a piggy bank. And in this article, we’ll share some of our favorites with you. So, keep reading!

Budgeting for a House 101: Important Tips to Help You Save

Tip 1: Start “Paying Your Mortgage”

Figure out roughly what price house you can afford. Use a mortgage payment calculator to figure out your monthly payment at a reasonable interest rate. Then, put this amount into a dedicated high-interest savings account each month.

Tip 2: Cut Back on Your Expenses

How do you do this? Implement a lot of small changes in your consumption habits. Here are some examples:

  • Skip Starbucks and instead get a mini coffee maker that uses pods
  • Make lunches at home and take them to work
  • Skip the prepared food at the supermarket but note the ingredients and try making it yourself. It’ll probably taste better that way too
  • Add water to liquid soap, shampoo, face wash, etc. You’ll find the last longer and work just as well

You get the point here, right?

Tip 3: Take a Part-Time Job or Freelance

You might even find something you’ve always wanted to try, like dog-walking or impersonating sick people to help medical students. Make sure that all your income from this gig goes into that high-interest savings account we mentioned.

Tip 4: Get Some Advice From a Professional

It’s not hard to find someone to give you personal finance advice. Ask friends and family. Check with your bank or credit union.

Tip 5: Limit Your Number of Credit Cards and Pay Them Off

If you’re not paying off your credit card debt every month, you’re accumulating interest–possibly a lot. Figure out what it would take to pay off your balance every month. Then do it.

Tip 6: Cut Way Back on Restaurant Dining

If you like to cook, have at it! Cooking is a great de-stressing activity. If you need some help with cooking, try subscribing to an inexpensive meal delivery service like Home Chef or Hello Fresh.

Then discontinue it when you’ve gotten good at it and can make the rather easy recipes with stuff you buy at the store yourself.

Are You Ready to Move In Yet?

When you own a home, you realize how much homeowner’s expenses take out of your paychecks. When you rent, you pay a regular amount to a landlord–who then takes care of necessary repairs.

When you’re paying for these directly, things will feel different. Keep this in mind as you start budgeting for a house.

The best way to save for a down payment on a new house is to start living as if you already owned a house. This means setting aside money for your monthly mortgage payment as well as cutting back on discretionary spending.

It won’t take long before the money starts accumulating, and you can have some fun browsing through real estate websites for available homes near you.

Check out some of our other posts for more resources.