Skills You Need to Save Money
When Buying a Home
There are two ways to buy your dream house. You can either work day and night and give up on other goals that you have. Or you can learn to spend wisely.
And we recommend the latter. Saving can help you buy a house much more quickly compared to increasing your income. It's also convenient and stress-free.
All you need are a few skills, which is what we’ll be discussing in this post. So, hop along!
1. Bargain Hunting
Bargain hunting refers to looking for goods and services at a price lower than usual. And research suggests that this handy skill is passed to people in their genes.
If you’re bad at negotiating or hunting down discounted variants of the products and services that interest you, it's time you begin working on this skill. One good way of doing this is to collect coupons everywhere you go and develop a habit of using these at the right time.
Note that bargain hunting is not about using every coupon, i.e., every discounted opportunity. It's about using the right one at the right time. Otherwise, you may end up spending more instead of saving.
You can scale this skill by looking for cheaper, quality brands instead of your go-to brands. Develop a habit of reading reviews and keeping yourself updated. Plus, actively prioritize saving each penny.
By the time you're buying a home, this skill will help you save a great deal of money. You'll find yourself instinctively hunting for the cheapest options and negotiating effectively.
Budgeting refers to utilizing available resources such that they cover all due expenses, keep you debt-free, and save any additional amounts for emergencies or future expenditures. Simply put, it is a plan of how you'll spend your income to meet your goals and needs.
You can begin budgeting by tracking two things:
- Your monthly income
- Your monthly expenses
To track both of these, you will need at least 30 - 60 days. For estimating your monthly income, you can refer to your monthly bank statement or keep a record manually in a diary. And for expenses, record the amount you spend on each item every day. It's a good idea to develop a habit to do so at the end of each day.
Google Sheets is an excellent tool to track your expenses. But if you’re not confident about spreadsheets, you’ll find many budgeting apps online.
In 30-60 days, you will have reliable data to make solid decisions and create an efficient budget plan. Once you have the data, identify your financial weaknesses. Remember, you're saving for your house and every penny counts. So, do not shy away from identifying small unnecessary expenditures as your budget weaknesses.
Furthermore, when it comes to budgeting, it is essential that you also consider your financial goal. When coming up with your goal, you must try to imagine every cost that you may encounter when buying a home.
Costs can include anything such as pest inspection fees, land tax or even legal fees. Legal fees are a particularly expensive cost that you should be aware of when planning your budget, however you can save money by using a conveyancer over a solicitor.
For more information, check out Joust conveyancer vs solicitor guide, which will help explain how to save money when it comes to legal expenses encountered in your home purchase.
3. Strong Decision Making
In order to strengthen your budgeting skill, you'll need a supporting skill — decision making. In finances, smart and strong decision-making can save you from lots of financial trouble. It can save you from debts, loans, tight budgets, and of course, stress and worry.
But the question arises; how will you know if you're good at decision-making? Well, it's simple. If you identify any of the signs listed below, you're not taking good financial decisions:
- You feel under pressure
- You're considering a loan
- You've got a bad gut feeling
- There's no plan B
If you still find yourself unsure about your performance, we recommend checking out our all-embracing guides about effective decision-making.
On average, housekeepers charge $25 - $90 per hour, and they work for 4-5 hours every day. If you quit hiring housekeepers and learn to manage your house all by yourself, you could be saving $3000 - $10000, depending on your lifestyle. You can begin strengthening your housekeeping skills by setting timers and completing chores within the set timers.
This is the last skill in our list but it might be the most useful when you’re trying to save money for a house. If you're left with a good sum at the end of the month, it's a good idea to consider investing it.
There are countless areas for investment, such as real estate, stocks, bonds, education, and bank products. And while it’s impossible to cover each in this article, here are some basic tips to keep in mind as a beginner:
Analyze your risk capacity — this will help you understand how much risk you can afford to take
Start small — don't go all in at once, especially if you're a beginner
Diversify your portfolio — don't put all your eggs in one basket
Stay updated about the market trend — you can do this by taking advantage of the countless investment blogs, newspapers, and YouTube channels online
Learn about different investment instruments to find the most suitable one for your situation — these include stocks, mutual funds, real estate etc.
It's also important not to invest in volatile markets. For instance, you should avoid investing in cryptocurrencies as they're highly volatile and you could lose all your money in an instant. Remember, saving money for a house is a long-term endeavor and it's better to invest in something that's stable and will appreciate over time.
For more information on how to get started with investing, check out Understanding Investing.
Saving money to buy a house is no easy task, but it's definitely doable if you're willing to put in the effort. You'll need to be disciplined with your spending, be smart with your investment decisions, and most importantly, stay patient.
If you can master these skills, you'll be well on your way to owning your dream home in no time. Good luck!