For many people, the opportunity to buy a new house is an exciting time. It also comes with extra financial burdens and stress, as you try and figure out how to fit a mortgage into your financial plans. Fortunately, you can take small steps to not only save for your future home, but continue saving once you have secured your mortgage.
Your car usually represents the second or third largest part of your financial planning along with healthcare. A house and mortgage is typically going to be your largest monthly expense but a car payment, insurance, and repairs aren’t far behind. So how can you cut down on the money you spend on your car? There are a few different options.
For starters, you can always go for a cheaper car with a more affordable monthly payment. You might not win any style points with this option, but you could potentially save hundreds of dollars a month which can then be saved or spent on your mortgage. Sites like cars.com have a variety of both used and new options you can browse. Ideally you want to find a car with a low monthly payment. If you have a lease, it is easier to trade down to a cheaper option, while if you own a vehicle or have a car loan, you will likely have to sell those first, before finding a new vehicle.
Buying a new car can also end up being a money saver. If you are hanging onto an old car that needs constant repair or gets terrible gas mileage it might actually be worth your money to buy a newer car. You will have to calculate how much you are spending on your car per month, and then decide if upgrading to a newer vehicle makes sense.
One of the easiest ways to save money is buy eating out less. On average you can have multiple meals at home for the same price that you paid for one meal eating out. Staples like pasta, rice, and bread are cheap, and augmenting those staple items with vegetables and meat can give you variety in your meals while still providing nutrition. Eating out all the time ends up costing a fortune, as you are likely to spend upwards of twenty dollars every meal. Eating at home will save you money that you can then use to finance your home and mortgage.
Making A Budget
If you know how much you expect to spend on a mortgage, or how much you need to save in order to secure your home, creating a detailed budget can give you a visualization of where your money is going. Easily made from online templates, or an excel spreadsheet, a monthly budget will help you keep track of your money. Start out with your fixed prices (rent, mortgage, insurance, etc.) and then factor in your fluctuating expenses. You should be able to see clearly where you can cut to make room for your new home.
Buying a house represents a big step in anyone’s life. Sometimes you have to pinch a few pennies in order to save enough to afford a mortgage. With some thoughtful planning you can make the adjustments to afford your own home.