The number of homeowners vs renters is on the path of a cataclysmic shift in the next few years, with the number of owners dropping and renters rising. This could mean major changes for home prices as will happen when any supply increases. The best thing you could do to be prepared is to start building your mortgage savings account now.
For most Americans, their biggest asset is their home. Owning a home lends you a lot of freedom, keeps you from being blindsided by rent increases, and helps build wealth for the future.
While not everyone might think homeownership is within reach, there are clever ways to start building for the future while living on a budget. Even if you live paycheck to paycheck, maybe it’s time to think about ways you could start saving for a home. Here are 7 tips that could help build a mortgage savings account.
1. Keep Your Budget And Your Promises
While you might still be struggling with New Year’s resolutions, it’s important to make promises to yourself and keep them. And just like fitness or health-related goals, it’s important to make your goals achievable.
Don’t make your goal “Save $10,000 by May”. As you fall short, you’ll only increase your lack of faith in the possibility of saving. Make small, weekly goals. Know when you’ve got something coming up, like a vacation or anniversary, where that goal will get the way of your fun.
Once you have the goals set, make a pact with yourself. Give yourself room to make mistakes and forgive yourself for slipping up. You can and you will.
Make sure you can keep your promise and you’ll be happy watching your savings grow.
2. Change Your Withholding Amount
Talk to the HR person at your job. If you’re regularly receiving a tax return at the end of every year, you could adjust your deductions to have that money put into your account.
At jobs with direct deposit, you may have the option to split your paycheck. You can automatically deduct a certain amount from your paychecks to have placed in a mortgage savings account. This way, you’ll build up your account without even trying.
3. Put Aside Extra Pay
Whether you get paid weekly or biweekly, you’ll be receiving 5 or 3 paychecks, respectively, a few months this year. Take that whole paycheck and dump it into your savings.
Don’t factor this into your weekly budget. Let it be a big bonus that you can use to infuse your account with some extra energy.
If you have any side gigs or second jobs you do during the holidays, try to put some of that extra money into your mortgage savings. You’ll find that the more your savings account grows, the more inspired you’ll be to put every little bit into it.
4. Look At Your Cell Phone Bill
While you might not like looking at your cell phone bill because of astronomical fees you’re paying, think about whether or not you can cut back on services. If you’re in the market for a new cell phone, post online to see if any friends have one sitting in a drawer they’d be willing to part with.
See if you’re paying for extra services you don’t need. If you’re paying for adult children on your plan, ask them to start kicking in a portion of the bill.
Shop around for your next contract. If you can get out of it, try to find something cheaper. If it’s hard to get out of, try using Cellswapper to see if they’ll buy your contract from you.
5. Scrutinize Your Utilities
Are you often blindsided by rising gas and home heating prices? If you don’t watch your heating carefully, you could end up paying hundreds extra a month. Make it a habit to turn your thermostat down when you’re away from the house.
Are you using high-efficiency lighting? If not, it could be time to invest in better bulbs for your home. High-efficiency LEDs and CFLs are slightly more expensive than traditional bulbs but they’ll last for years and you’ll be using far less electricity.
Are you paying for a huge cable and internet package that you never use? See if you can scale back to a more basic, barebones plan. Use that as an excuse to spend more time with friends, while saving $50-$100 more a month.
If you run a tight enough budget, you could be saving hundreds a month just by making these small adjustments. While they may not seem like much now, over a year or two, they could help build your savings account in a big way.
6. Get Healthy, Save Money
If you’re a smoker, you could be spending hundreds every week just on cigarettes. Not only are they dragging down your wallet, but they’re also dragging your health into the gutter. You could add years to your life and thousands of dollars a year to your bank account by working to break this addiction.
Even social drinkers could be spending hundreds a week at bars and liquor stores. This spending adds up quickly, just as quickly as the savings could. You don’t need those extra calories as much as you need that extra money.
When you hit the grocery store to buy some healthy snacks, make you’re continuing to save money every step of the way. Save your money and then throw a party in your new house to celebrate later.
7. Cut Travel Expenses
If you drive to work every day, you could be spending hundreds a month on a car note, insurance, gas, and repairs. If you’ve got options to bike or take public transportation to work, think about changing your transportation methods.
Even working from home one or two days a week could be a nice extra bit of savings in your mortgage savings account.
Be Clever And Your Mortgage Savings Account Will Grow
While you should be entitled to a relaxing treat at the end of your work week, make sure that you’re budgeting for everything. It’ll make those treats taste all the sweeter when you get them.
If you’re ready to start tightening the belt to build your savings into a home, contact us today to get started.