Your 20s can be a lot of fun, but if you want to buy a house in the future the time to start saving is now. As you consider how to make a budget, keep in mind that you don’t want to restrict yourself too much. You have to think about the experiences you want to have, along with the ways in which you want to save for a house and how soon you expect to buy. If you don’t want to buy anytime soon, you can take a little longer to save, but don’t put it off completely. Time moves fast and it’s important that you’re ready to buy a house when you decide it’s time. If you’re not financially prepared, you could be stuck renting a lot longer than you want to be.
1). Save the small stuff.
It’s been said that you shouldn’t sweat the small stuff. That’s probably true, but you can really help your home buying efforts by saving the small stuff. Those few dollars and cents that you would spend on convenience items definitely add up fast, and over time they can mean hundreds or even thousands of dollars toward a down payment on a house. So, enjoy that candy. Just buy it in big bags at the supermarket when it’s on sale, instead of individually in the convenience store on your way to work. You’ll be surprised at the price difference.
2). Start now.
Even if you’re not quite ready to buy a home, you can definitely start saving. You don’t want to get to the point of wanting to buy a home, and realize that you have no savings and no down payment. There are programs that let you get a mortgage with little to no money down in some cases, but the fees, costs, and interest rates are often higher. You can avoid that trap by starting early. Plus it’s easier to save when you only have to put a little bit back each week or month, because you have more time to come up with the money you need.
3). Use a change jar.
Save your change. Bring it home in your purse or pocket, and put it in the jar. When the jar’s full, roll the coins and put them in the bank. Then start again. You don’t need to spend that money, and even pennies add up. A lot of people don’t really see the value in saving their change, but once you see how much you can accumulate in that change jar, you’ll be hooked on the idea. It’s a very simple way to end up with some decent savings. For even more fun, get a bigger jar. It will take longer to fill, but the amount you’ll have to roll and deposit will be more impressive.
4). Make room for fun.
There are a lot of different ways to save money and budget in your 20s, so you can have the down payment for a house when you’re ready to buy. You don’t have to stop having any fun at all just because you’re saving. By scaling back your most expensive fun, you may be surprised how much more money you have. Have friends over for dinner instead of going out, or do something free on the weekend instead of a pricier event. You’re not stopping your fun, you’re just adjusting it a little so you can have what you need for later. It’s a good compromise.
5). Reduce the expensive coffee consumption.
That $4.00 coffee you buy on your way to work each morning? How about making that a Friday-only treat? Make coffee at home on the other weekdays, and you’ll soon see a lot of savings. Quite often, it really is the little things that end up mattering most.
6). Consider splitting the rent with a roommate.
If you have a second bedroom that’s not being used in your apartment or rental house, consider renting it out. Just make sure it’s okay with the landlord. Or, you could move in with a friend or rent a room in someone’s house. Any way you can reduce your rent payment and still have a good, safe place to live means you can put that much more money toward buying a house when you’re ready.
7). Consider living at home, if possible.
Deciding how much you want to spend on a house is an important part of learning to save and budget for one. If you get along well with your family, perhaps they can help you save by letting you live at home. Whether you pay them rent or not is all up to what kind of agreement you can work out, but it’s generally much less expensive than other living options.
8). Ensure you have the right bank account.
If you don’t have a savings or checking account that pays you interest, it’s time to get one. Even if the interest rate is very low, it’s still money you didn’t have before. Just be sure that the account doesn’t come with big balance requirements you can’t meet, or hidden fees that will eat up any value or advantage you’ll be receiving. With the right account, you can get some extra money toward a future home purchase.
2 Point Highlight
Your 20s can be a lot of fun, but if you want to buy a house in the future the time to start saving is now.
There are a lot of different ways to save money and budget in your 20s, so you can have the down payment for a house when you’re ready to buy.
