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9 Best Ways to Save for a House

9 Best Ways to Save for a House
Jennifer Leach Jan 22, 2019
Want to Earn Some Extra Money?

In today’s market, people don’t always feel encouraged to save money.

There must be a better way than drowning in debt. When the time is right, you want to be able to comfortably save for a house.

Imagine that you’re finally done with renting, ready to buy your own home. What’s holding you back?

The problem is, how can you possibly save money for a home with the your everyday expenses, monthly bills, and other life necessities? It’s a lot easier than you might think to save for your own home.

In this article, we’ll explore 9 ways you can accomplish just that: the best ways to save for a house.

Whether you are looking to save for the down payment or perhaps you are looking to take the whole purchase and pay cash, we will explore some creative, helpful ways to help you save money purchasing your home.

What to Consider when You Save for a House?

There are several factors to take into consideration. Ask yourself these questions:

Are you only saving for your down payment or are you saving for a cash purchase of your home?

What amount of money do you feel comfortable setting aside before looking for more ways to get creative and save?

What areas are non-starters as far as when cutting expenses?

Have you set a price range that you would like to stay within when looking for homes?

Are you going to factor in “hidden costs” such as closing costs and inspection costs?

Before looking for ways to save, start by looking at these factors and then check out our tips for finding “hidden” money to save!

1.) Start Tracking Expenses

This is super important: track your expenses! You really need to track where you spend your money. This allows you to see where the money is going.

Expense tracking can help you identify gaps in your budget, have better insight about your spending habits, and many more benefits that might surprise you!

Here’s how you do it:

Keep every receipt that you get for 14 days.  Then, record them in a notebook and see where you are spending money.

Use the name of the business, type of expense, and amount when you record them.

Once the 14 day period ends, take each group of expenses, add them up, and see which ones can be eliminated.

Once this is done, you can then plan on putting the money you would have spent in a savings account to use towards purchasing a home.

Here’s an example:

Expense                 Amount

Coffee                         $7.23                           Coffee Total:                                       $36.15

Coffee                         $7.23

Coffee                         $7.23

Coffee                         $7.23

Coffee                         $7.23

Deli Lunch                   $14.33                       Deli Lunch Total:                                 $76.49

Deli Lunch                   $14.33

Deli Lunch                   $22.75

Deli Lunch                   $22.53

Deli Lunch                   $6.55

Groceries                    $376.05                      Grocery Total:                                     $376.05

Gas                             $65.00                          Gas Total                                            $65.00

Bus Punch Card         $15.00                        Bus Punch Card                                 $15.00

                                                                           Total Expenses                                   $568.69

Potential Savings                                     $177.64

When looking at the chart above, it makes sense that the bold numbers and expenses can be eliminated.

Perhaps, instead of buying your $7 coffee every day, you make coffee at home and use a travel mug.

The deli lunch can be replaced with either a home lunch or even changing the amount you spend to a lower cost would be effective.

By looking at the example above, you can see that by eliminating these non-essential expenses, you are able to put almost $177.64 into savings.

Imagine if you saved that much every week. The total saved could be around $9,000!

Try out these easy tools to help you track your expenses:

A tip for saving even more? Check out these 6 expenses you don’t need and can ditch now!

2.) EliminateYour Spare Time

Spare time equals spending cash. Think about it. When you have extra time on your hands, extra spending happens:

  • You eat out
  • You go shopping
  • You hang out with friends and family spending money

So, what can you do?

Eliminate your spare time. This can be starting a free project at home, starting a free hobby, making money from your hobbies, or other ways of making extra money. You can even make money from bed!

Free home projects to try:

  • Deep clean weekends
  • Exercise
  • Practice minimalism

Free or cheap hobby ideas to try:

  • Teaching online
  • Knitting
  • Candle-making

Making money from home ideas:

  • Fiverr-You sign up for free and complete simple tasks for $5+.
  • Upwork-You join for free as a freelancer then bid on jobs such as writing, video editing, logo creation, etc.
  • Swagbucks-Here you can earn points that translate into cash and gift cards. 
  • Survey-Taking- Sign up for the best surveys and get paid to share your opinion. It’s a legitimate and easy way to earn some cash in your spare time. Our two favorites our Survey Junkie and Vindale Research.

If making extra money with a side hustle has piqued your interest, take a look at these other ways you can earn:

  • House Cleaning
  • Pet Sitting
  • Dog Walking
  • Lawn Care
  • Renting your goods, like power tools
  • Uber Driver

Searching for even more extra money opportunities? Look at 101 Free Ways to Make Money Now

The possibilities are truly limitless with some creativity and effort. If you commit to saving the extra cash that you earn, this is a great option to have for saving for a home purchase.

3.) Eliminating Non-Essentials from your Budget

We talked about eliminating items from everyday spending up above, but what about cutting back on monthly expenses. This goes a bit further beyond your morning coffee on the go.

Most of us have different things we feel are necessary, but often, once circumstances force our hand, we realize that it is not something we can’t live without.

One example is cable TV.

Cable feels like a necessity for some but with some cable companies charging as much as $100/month for basic cable, it’s an expense you should consider letting go of.

Eliminating cable TV doesn’t have to mean getting rid of television programming all together.  Downgrading is a cost-effective way that will make you and your wallet happy. Skipping cable and going for Netflix, is a nice way to save as much as 90% on this expense every month.

Consider these expense swaps you can try:

Expense                     Cost                Replacement             Cost                Savings

Cable TV/Internet        $125.00           Internet/Netflix            $  58.00           $  67.00

Commute Cost            $155.00           Bus Pass                     $  30.00           $125.00

Groceries                    $375.00           Budget Meals              $250.00           $125.00

Dining Out                   $150.00           Eliminate                     $         0           $150.00

Recreation                  $  75.00           Downgrade                 $  25.00           $  25.00

Estimated Costs       $880.00                                               $363.00           $492.00

If you were to commit to cutting these costs for a year, and putting the money saved into a savings account, at the end of one year you would have approximately $5,904.00!

Looking at your budget is a good place to start.

Then, search for ways to cut costs.

A basic budget might include the following:

  • Rent/House Payment
  • Vehicle Insurance
  • Renter’s/Homeowner’s Insurance
  • Savings-Home
  • Savings-Emergencies
  • Retirement
  • Phone
  • Internet/Cable
  • Utilities
  • Health Care Costs
  • Transportation

This is a starting point. A full budget should reflect your current needs.

4.) Cut Down on Grocery Costs

Many people tend to spend way more money on groceries and food than necessary.

It’s a great idea to review your grocery budget at least twice a year. Look at your costs and see where your grocery budget is going. Then set a target to try to meet. 

Challenge yourself to use $50 less each month for the next six months, for example. At the end of a year, you will have another $600 saved towards a home purchase!

5.) Cooking Budget Meals

There is no better way to save money than to cut down on groceries. It is easier than cutting most costs and cooking on a budget is a good way to curve spending.

When we think of budget meals, we often think of bland, boring meals that offer no nutritional value.

You can have healthy food on budget!

Here are some good websites that offer nutritious, budget-friendly recipes:

Struggle Meals-This is a page on Facebook where the host shows you how to make balanced meals that cost under $2.00 per plate. He has a great take on food and shows you how to make meals cheaper and better. He gives tips on how to save money on ingredients and cooking materials.

Busy Budgeter-This website offers meal plans for budget-conscious meals. There are different menu types like: quick and easy, comfort foods, etc. The meals look like they are great options out there for each individual taste. It is worth checking out.

Eating Well-This site goes one step further than what some other sites give you. There are meal plans here and then also shopping lists. Just because they are free sites, does not mean that there needs to be huge efforts involved. The meals are quick, cheap, and nutritious.

Cooking Light-This meal planning site offers meal plans for a family of 4. If there are only one or two of you, I would suggest still making the full plan and using the leftovers for work lunches or also for second meals. This ensures you can stretch your food budget further.

Thrifty Frugal Mom-The article at this link is a great resource. It offers advice on how to plan a meal for the lowest costs and gives tips on grocery shopping with frugality in mind. There are meal plans available as well for people who need help getting started.

If you’re looking for practical, everyday budget food ideas, check out the sites above.

6.) Start a Savings Account

Opening a savings account is important. Shop around and see who has the highest interest accruing accounts available. Check out these awesome finds:

NetSpend Savings Account Gives 5% Interest + $20 Sign-Up Bonus

Discover Bank Has One of the Highest Savings Account Rates -0;95%

Setting up an automatic transfer is also a good idea. Saving automatically takes away the chance of you missing the money. No management or manual transfer from you is required. It’s really the best way to save!

Saving can be a struggle for some, and any little way to make it less painful is what you should aim for.

Next, you want to consider have 2 savings account. One savings account for home and one savings account for emergencies. 

Your home fund is for one-off expenses where you may have overspent for the month.

The emergency fund is 6 to 12 months (longer is better) of your net earnings that you dip into in an emergency scenario.

Want some advice on building up your emergency savings quickly? Take a look at how to get started building an emergency fund in 5 months.

7.) Reducing Debt

Many people have debt. It seems to be a fact of life for most people looking toward buying a house.

Reducing your debt is great because it will free up more money in your budget that you can contribute to saving for your home. Paying off balances on credit cards, medical bills, and student loans is a good way to start.

Additionally, try to stop using credit, like credit cards, as this will be counterintuitive to your goal of reducing debt. 

Lastly, don’t make these 9 mistakes when trying to pay off debt.

8.) Stockpiling your Bonuses and Tax Refunds

Along with saving money from your budget, saving your tax refund and/or bonuses from work is another way to pull together cash for a deposit on a home.

This is an easy way to help you save for your home purchase.

9.) Selling Unwanted Items

A great way to raise money is to sell your unwanted or extra stuff.  Here are some ideas to help you sell your stuff:

Yard Sale-One man’s junk is another man’s treasure. Yard sales are fantastic, and there is no better way to try and earn some extra cash. We all seem to have items laying around that we no longer use.  If we don’t need them, are planning to move into a new house, then why not relieve ourselves of them before hand, and help us to achieve our dream goal: buying a home.

Ebay – Some higher value items would be better off being sold on eBay or Amazon. This way, collectibles you may have, will get top dollar rather than lower yard sale prices.

Consignment shops- These second-hand stores are a good way to get money out of used clothing. There are even some that will take clothing for cash rather than on a consignment basis.

Craigslist – This is a good choice for bigger ticket items as well. You can ask your price and accept offers without havingto pay fees. Be careful though when going this route. Sometimes it can be unsafe, and you need to be vigilant. Do not accept checks or money orders frompeople you do not personally know. Cash is the best option.

Etsy-If you have a crafty side, you can make items and sell them on Etsy. It is a fun site where there are quite a few unique ways to sell. Etsy isn’t limited to just crafts either. You can sell digital products like workbooks, digital files, and PDF’s that you have created.

Need more inspiration? How to Sell Everything You Own: An A-Z Guide

Final Recap

When saving to buy a home, the options are abundant. There are simple ways to make easy lifestyle changes to help you save for a house.  Set your budget, look for ways to cut “luxury” costs, and get creative when earning money. Hopefully you have found some handy tips to make saving easier for you. Happy saving!

Jennifer Leach

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