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Preparing to purchase a home? It’s time to get your finances in order. Although this is an exciting time, you’d be surprised to learn how much a new home purchase can leave you strapped for cash. Saving for your home can get you prepared to have money for your down payment and a discretionary fund to cover any additional expenses that may come up you haven’t anticipated. Here are a few tips for saving for your new home:

Budget

Creating a monthly budget will help you see what you spend money on and where you can cut unnecessary expenses out.

Stash your savings

Put every penny you save in an account that is hard to withdraw money from. You can use another savings account for other things, but this one should be off-limits.

Automate it

Your savings should automatically come out of your paycheck or withdraw from your checking account. By doing this, you’ll get used to not having that money while building your nest egg.

Bank any excess

If you got a refund from a rebate or something else unexpected, take the time and send that money to the savings stash.

Downsize

In order to get fully ready to move into a home, you may have to downsize your place to save money. Saving 20% of your rent to go towards the home fund is helpful and commendable.

Additional work

Taking on side jobs while you’re saving will help you get the amount you are trying to save in your pocket a little bit faster. This extra money can help pay down bills and save at the same time.

Cut retirement giving

Until you save the amount you would like to use for your down payment and other incidentals, cut the automatic payments into your retirement account. Once you have achieved the amount you would like to save, restart your automatic withdrawal.

This can be a tedious process, especially if you aren’t used to saving. Confide in someone close to you to keep you accountable. This person is someone who won’t tempt you with going out to eat or meeting to catch the latest sales. You can also make it a goal you share with everyone, and they all start saving for something special too. It’s a process so cut yourself some slack when you’re feeling as if you could be saving a lot more, or you slipped up. If eating out was your thing, buy the ingredients at the store and cook a gourmet meal, or if you went to the movies, subscribe to a streaming service instead.

You’ll put yourself in the position to get your home sooner than you think while adopting habits you can continue to use throughout the year.

Tag: Savings Plan