7 Saving Strategies For First-Time Home Buyers

While we all know that saving for your first home can be difficult on your finances, it isn’t impossible to do. For first-time home buyers, there are plenty of tips to help them with their personal finances as they get ready to buy their first home.

These tips help you make saving money a habit so that you can do it easily and at a good pace. So, if you are buying your first home and need help, keep reading this article to learn more about these seven saving strategies right now.

Use These 7 First-Time Home Buyer Tips To Start Saving You Money

1. Round Your Spending Up

The first thing you can do is round up spending. What is round-up spending and how exactly does it work? Well, round-up spending is just as it sounds – it rounds up your spending to the nearest dollar amount and the difference between what you actually pay and what it is rounded is then automatically deposited into a savings account.

Let’s say you spend $5.60 on a snack at the store. If you are using round-up spending, the price goes up to $6.00, with the 50-cent difference going into your savings account automatically. While this isn’t a lot of money, it will add up the more you spend. Remember, regularly setting aside a small amount of money will eventually make a big difference.

Once you begin using this automatic savings tool, you'll be shocked by how much you have in just a few months. There are two ways you can use round-up spending to make some more money as you spend. The method that works best for you will depend on how you typically spend money when you go out — cash or card:

• Card spenders — You can round up your card spending to the next dollar or five and move the extra into a savings account. Depending on your bank, you might be able to automate this process, making it even easier to follow.
• Cash spenders — You can keep your change and store it in a jar before transferring it to your savings account. Another method is to choose a certain type of note and only save these.

2. Use The 25% Rule

While you use round-up spending, it's a good idea to determine how big of a house you can actually afford, including property taxes, home insurance, PMI, any HOA fees, interest, and principal. When added together, this should equal no more than 25% of your monthly income. For instance, if you earn $6,600 per month, your maximum home payment is $1,650. You can use a mortgage calculator to discover which house prices will work with your budget.

3. Switch Habits To Accelerate Saving

You don't have to work solely with the money you currently have to spare right now. In fact, first-time home buyers benefit from redefining what you consider essential parts of your life. Whatever you do, or whatever parts you cut out of your spending, ensure this extra money goes right into your savings account. That way, you can see your savings grow steadily over time, providing some much-needed motivation. Here are a few ideas to get you started:

• Make coffee at home;
• Use a cheaper supermarket;
• Switch from TV subscriptions to on-demand TV;
• Swap phone contract to a sim-only contract;
• Move in with family to save on rent;

4. Ask For A Raise

If you don't have much money left over to save once you've paid bills, it's time to ask for a raise from your job. Now, before you begin talking to your boss, keep a few things in mind. You have to consider what kind of employee you are before you ask for a raise. If you feel your work deserves the raise, then you can go ahead and ask. To increase your chance of success, make sure you come prepared, time it right, and balance confidence with graciousness.

5. Automate Savings

As we alluded to earlier, automating your savings is one of the best strategies when it comes to saving money for first-time home buyers. It's especially useful for individuals who struggle to manage money on their own. You do have to make sure you are using a bank that allows you to have an automated savings account. Once you’ve chosen a bank that does, all you have to do is set it up and decide how much you want to save. That way, you can set it and forget it!

6. Regularly Review Your Plan

Just like your budget, your savings plan shouldn't be stagnant. Prices for things change constantly, so the way you manage your money – which includes how much you set aside for savings – will have to adjust as well to accommodate the changes. So, you will need to revisit your plan every month or so to discover whether you can commit more money to your home savings or if you need to pull back on how much you are setting aside. 

7. Don't Let Emergencies Ruin Your Personal Finances

Saving for your first home can be stressful as it is – but couple it with one of life's many curveballs and it reaches a completely different level. Luckily, you don't need to let these emergencies destroy your personal finances. Instead, you can secure a loan from us at Wisconsin Auto Title Loans Inc. for help. We offer both title loans and signature installment loans, giving you two convenient options.

With a title loan, you are using your lien-free car title as collateral to secure up to $15,000. With an installment loan, you don’t need any collateral because we use your ability to repay to determine if you can get up to $1,500. Both of these loans come with a process that is simple and quick for you to follow. All you have to do is fill out the online form on our website to learn more about them.

Use These Saving Strategies If You Are A First-Time Home Buyer

Saving for your first home can be daunting, but by having these seven saving strategies, you can make the process a lot less stressful! So, begin saving your money right now so you can buy the home of your dreams. And if a crisis does strike, one of our loans at Wisconsin Auto Title Loans, Inc. is a safe option. You'll have the cash to get your personal finances back on track in no time. So fill out the online form now to begin!

 

Note: The content provided in this article is only for informational purposes, and you should contact your financial advisor about your specific financial situation.