Saving money to buy a house might seem impossible, especially on an average salary, since you could be looking at years of regular deposits into your account before getting enough for a down payment. Then it’s a lifetime of making monthly mortgage payments. But if you’re smart about it, you can significantly reduce the hassle of home buying.
You can automate your savings or start a side hustle to earn a little more on the side. Of course, you can always make some sacrifices in your day-to-day life. Additionally, keeping your money in a place that grows it passively (i.e., the best savings account with a high rate) can help you move into your dream home sooner than you think!
We cover other personal finance topics on our blog as well, such as understanding the difference between gross income and net income and how to use remittance banking to send money abroad. If you’re interested in improving your financial literacy, be sure to check out what else we offer.
How Much Do I Need To Save To Buy A House?
Before you start saving:
- Figure out a goal amount to reach.
- Explore the market, look at the different available properties, then do some research to see the typical prices of your desired neighborhood, type of house, etc.
- Apart from the down payment, which is usually 20% of the property value, consider other charges needed to buy a home, including closing costs, agent fees, and real estate expenses.
Once you estimate how much you’ll need, make a savings plan and a goal timeline to make it easier to track your progress.
How To Save Money For A House Fast
There are three tricks to saving money fast. The first is making sure that there’s always something set aside each month; the second is earning a little more when you can; and the third is reducing the amount you spend in your everyday life, then putting that extra into your savings.
Automate Your Savings
Think of your savings like a bill that you have to pay every month. You can’t skip it or forget it—and the best way to avoid that is to automate it. Once you’ve established the amount you must set aside every month based on your savings plan, set up an automatic transfer from your checking account to a savings account. That way, you don’t even think of spending it, and you can be sure that every month your account is growing little by little.
If you’re sending the savings amount to other people, like family members in your home country, consider looking at remittance in banking options as a way to transfer the amount abroad seamlessly.
Generate More Income
Thanks to remote work and the gig economy, people have so many more opportunities to do extra work during their free time. You can work as a freelancer or offer consultancy services as a way to earn a few bucks on the side. But make sure you’re well informed about business-related financial concepts before you begin, such as the difference between gross income and net income.
If you don’t have the time for a second job, you can consider renting out free space in your property or even just clearing out your garage to set up a yard sale. Any extra amount you make, even the smallest penny, should be directed to your savings.
Reduce Your Expenses
Review your current expenses and take a look at what you can live without, be it weekly dinners out or some other vice you’d be better off kicking. You may even find a few things on your grocery list that you can sacrifice—or at least replace with cheaper options. You’d be surprised when the extra money begins to pile up, and it can all go into your savings.
Save Harder, But Be Smart About It
Just as important as saving money is making sure it’s growing over time, ideally in an account that pays out regular interest.
A high-yield savings account is excellent for anyone who wants a quick and convenient way to grow their savings while still having the option to access their funds readily. With the Cashero High-Yield Savings Account, you can earn up to 10% APY versus just 0.01% from traditional banks, which means your money works for you – beating both the rates offered by most other financial institutions and inflation!
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