At some point in our lives, we all wish to settle down, but not in any first place available or house or flat within budget that we find. We want to create a home out of the place we buy, so we start to consider many things that could be amazing if we could get them included and all for an affordable reasonable price.
Things like, what city would you want to live in for the rest of your life, what would be the ideal size of your dream house, should It have a swimming pool, a balcony or maybe a garden are all factors to consider. When you start to have more and more requirements, the house prices can easily go up giving you the feeling that you will never be able to get a similar home in your lifetime.
However, if you work in a smart way then you will see that it’s possible to save enough money and get your dream house sooner rather than later. The best way to do it is by creating a realistic financial plan based on your guaranteed expenses and sources of income rather than imaginary estimation.
You also have to set a timeline that is based on real factors and realistic goals. That’s why we help you do just this with the following tips so that you can save enough money to buy your dream house within five years or less!
A five years plan to buy your dream house:
1- Open a savings account:
You may already be doing this, so it probably doesn’t sound groundbreaking, but are you doing it the right way? It’s very easy for most of us to spend more money than intended in a month and even question ourselves ‘where has all this money gone?
It might seem that this is not much of a big deal or that if you really want to save then you’ll be able to but in reality saving doesn’t come as a second nature to every single person alive. Some people struggle with living way below their means or spending a lot less than what they make. And that goes even for people that make a lot of money! Spending money is not rocket science, it is a very easy and enjoyable thing to do when we get carried away or don’t worry much about the future.
That’s why, once you reach your payday and have paid all the monthly expenses of the previous and current month, you should leave the rest of the money in your savings account. That money should be considered gone or spent and no longer yours. Once the money is put in the savings account, you won’t feel tempted to spend on things you probably don’t need or impulsive purchases.
If you want to be able to accumulate even more savings quicker using this method, then you can even consider doing a second job at the same time as your current one. This way, you’ll be able to put money aside quicker than you originally thought.
2- Think twice before making big purchases:
It’s hard to save money for a house and, unfortunately, there are other things in life that we need that can be expensive too and make all that hard-earned money that you saved disappear in an instant. Of course, it can happen once in a while to feel a bit unlucky or have your car or something as random as the stove break down and there’s no way to fix this type of things.
These are possible expenses that should be expected from the start. And, you should have an emergency fund kept aside for them. What you shouldn’t do is replace expensive things, like your car or a fridge, before you need to. Since it can take a few years to save for a house, sometimes, people lose track of what matters and, when they end-up paying for a new car here or a new television model there. this way they go through their savings within a day or two and end-up months or years further from their dream house.
You need to think twice, or three times if need be, before making big impulsive purchases. If your things work perfectly well and they are just getting old, they can wait until you finish saving for your dream house or things that matter first.
3- Try to pay any debt you have, first:
It’s normal to have debt. Sometimes, you’re still paying your student loans, other times it could be a credit card or car loan. Usually, these are debts that you can pay quicker than a house so, if you focus on paying all your debts first, you will have more money at the end of the month to put into the savings for a future house.
This is easier said than done, and sometimes, just cutting back on a few expenses to try to cover your debts faster is not enough. It’s not possible for everyone to handle two jobs at the same time either, but you could take up some gig offers on the side or freelance jobs which easily give you a boost financially.
Even if these second jobs’ earnings go all towards paying off your debts, that would still be beneficial and worth doing. It will put you a step ahead in your journey to financial freedom or your journey to buying your dream house!
4- Make good research about mortgage loans and house prices:
Once you managed to save all you need for a house loan, you should be able to relax, put a large smile on your face and even celebrate but without undoing your long journey or breaking the bank!
That’s because you would have finally made it through the hardest part. However, it’s not wise to start house hunting immediately. You may be financially ready to put an offer on a house, but you should make sure that you’re getting it at the best price possible.
Start doing some market research to learn more about the average mortgage loans and house prices for the type of house, you intend to buy soon. These numbers can fluctuate depending on the economical situation of the country you live in, so you should pay attention to that.
Even if you’re ready to buy a house, see if that’s the right time to do something like that first because you may find yourself paying a lot more in mortgage loans than if you had waited just another six months to a year, for instance.