Save money for home loan with these actionable steps.
To save money for home loan seems to be daunting task. But it is not as difficult as it sounds. With all the expenses and tough economy, it gets bit difficult to reach financial goals, but if you will stay determined and are ready to make some changes in your lifestyle, you will be able to squeeze money from your already tight budget. There are three ways to save money for your deposit for home loan. Save, spend less and earn more.
When you will be able to concentrate on all these three methods to save money, you will really see the results fast. If you feel like you are missing on enjoyment or some thing, sit with your eyes closed and imagine yourself sitting in the cosy environment of your home. This will let you forget all the pressures of saving and will let you feel that eureka moment of getting the keys for your house in your hands.
Start spending less
1.Track your spending
Now as you know, you are saving for a big basic need of humans. You need a big deposit for this but you are not ready yet because you cannot save even a single dollar. Here comes the magic of tracking your spending.
There is always room for improvement in every area of life. So is the spending habits. Look for the places where you can cut your spending. Use this spending tracker to track your expenses.
2. Make a budget and stick to it
After tracking all your expenses, it becomes easy to make a budget and save money from it. Managing your budget is not only for bigger economies and companies, it helps in household savings also. Assign an amount to all the areas of life and stick to it.
Here is a very good post on how to make a budget on dollarsprout.com. There are many methods to make a budget, you can try the one which suits you and your needs. Making a budget would definitely let you save some money.
3. Get rid of credit cards to save money for home loan
Credit cards are a huge factor when getting a home loan and saving money. Pay all of your credit card debt and cancel your credit cards. Here in Australia, even a 5000 dollars credit card impacts your lending ability of 25000 dollars.
Also having a credit card sometimes let you feel that you can buy anything anytime. But remember, it is the money which you don’t own. And spending that money is not a wise thing to do. Banks always think that the credit card money is the one which you can spend anytime. It is always counted as money spent.
4. No travel for one year
Travel needs a good amount of money . If you skip vacation and travelling you can save that amount of money. It can save you the amount proportional to on the type of vacation you are skipping.
I am from India , living in Australia, and haven’t visited my family since four years. The reason was buying a house and settling in new country. Because travelling overseas always require a good amount of money. It becomes difficult to resist shopping in India. Everything is so beautiful and there are lot of varieties for everything. I thought it to be better to refrain from travelling instead.
5. Check for home owners grant
Check for any home owners grant if you can get. Some states provide first home owner grant. Here in Victoria Australia, we got about 10,000 dollars at a that time. It may change depending upon the state and time. But it really helps you because then you have to save less on the same amount.
Check with your local councils and states if you can get first home buyer grant.
6. Cut your grocery spending
It feels sometimes that you cannot save from anywhere. But if you know your budget and really want to squeeze some money, you can really save from your grocery budget. You just need to pay some attention to how you are spending and where.
Find some ways to squeeze money from your grocery shopping.
7. Start preparing your own meals
Preparing all the meals from scratch seems to be a daunting task, but believe me, you can really start saving some real money. It is like you have to spend more time in kitchen but you will be really surprised with health benefits for you, your family and your wallet. Everybody will be happy including your wallet.
8. Downgrade your car
Everybody likes big flashy fast cars. But they come with a price. They are expensive to buy, and needs heavy budget for maintenance and fuel. If you are considering buying a home in near future, go for a small and second hand car. It will save you lot of money.
If you have more than one vehicle but you don’t need it, sell it. It will get you some money for down payment.
9. Cut back on your coffee
A coffee a day doesn’t seems much. But spending even 5 dollars everyday on a cup of coffee will let you spend 150 dollars a month. If you are a coffee drinker and want to save that money, reduce your intake.Also put that allocated coffee budget to savings first and stop drinking coffee from out side. It will save you 150*12= 1600 dollars a year.
It requires a little discipline to control your spending habits like these,but you will be thankful to yourself that you did that.
10. Start using public transport and walking
If you use your own car daily, and you have access to public transport, start using that. It will really help you save some money and if you can walk to your work place, better. Both health and wealth will start improving.
11. Cut back on dining out
If you have that habit of gong out for dinner every week, reduce that to once a month. It will really help to save money. If you have kids who really want to go out, take them to some picnic spot and take home cooked food with you to save your self from spending money.
12. Go for free entertainment
Stat watching free to air TV. If you want to go for outing, choose the places that are not expensive and you can enjoy with little money. It is really possible to reduce spending money on entertainment. Be it TV or outing. Here are some ideas to reduce spending on entertainment.
Try these and limit your spending on TV and entertainment.
13. Choose your saving account wisely
Saving your money will require money to be kept in a saving account. Choose your saving account so that you don’t have to pay lot of fee on it. Some banks don’t charge any money on your bank accounts.
14. Automate your savings
Automate your savings so that you don’t have to think every time to save. You may forget sometimes or your impulse of going for shopping and buying may take over your saving . Automating your savings will take the pressure of saving money off your mind.
15. Go for advance methods of saving
After you have some dollars in account, it is time to start thinking about term deposits. Term deposits fetch you more interest rate than regular savings account. It will help in accumulating money faster than basic savings account.
16. Move with your parents
If you are living with your parents, it is really easy to save money which otherwise you will spend on rent. If you are living separately, it is time to move with your parents to save money. Your parents can let you live without paying anything or you can live by helping your parents with some money which would be lot less than renting your own house.
17. Save your salary raise, tax returns and any bonus
Any extra money is the money without which you were doing fine. Save that any extra payment towards your down payment. If you can get any good better paying job, go for it. Save any raise and increase your wealth.
18. Save as a couple
Having mutual understanding in money matters is of utmost importance. If one partner is a spender and the other one is working hard to save money for home, it becomes difficult to manage. But working as one team brings fruit earlier.
19. Move into flat-share
If you are renting a big house and paying lot of money than think of moving to a flat share. Or if possible, you can keep a room share. A person who shares a room in your house will pay some amount of money.
Earn extra with side hustles
20. Start a side hustle
Starting a side hustle will really fetch you some amount of money to save for your down payment. Many people start side hustles as hobbies or part time, and make it their full grown business. Internet has opened many options for starting side hustles which require little investment in terms of money.
21. Start surveys to earn extra
Survey sites and cashback sites help you in saving some amount of money. This amount will feel very small but could lead to a good amount of saving in the long run. Here are few survey sites to earn little extra money.
These are the survey sites I use to make some extra money.
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