Buying a new home is most likely the single most expensive investment you will make in your lifetime, aside from having a child and paying for their higher education. In the current economic climate, being able to afford a home is becoming more of a rarity, particularly for those of the millennial and Z generations. It isn’t an impossible goal, however. Here are five ways that you can budget for a new home.
1. Downsize your Lifestyle
To people at some income levels, this may be impossible, and that’s understandable. Frankly, some of the decisions in this arena can be extremely hard. For those who are better off, scaling back on vacations, new clothes, and fancy meals can make enough of a debt in spending that something can be tucked away for future property. For others, it can be the choice between eating and saving, or having to sacrifice a college education. It’s good to believe that no matter your circumstances, there is something you can save. Just make sure you aren’t suffering so much that the end goal of a home doesn’t end up being worth it.
2. Pursue a Raise
Asking for a raise can be a difficult task. Putting in the effort, time, and work to be worthy of one is also difficult, particularly in the era of a global pandemic. Some believe that a raise should be given after a certain period of time, given inflation and the ever-changing cost of living in the world. Ultimately a raise is in your best interest for countless reasons, and investment in assets is one of them. If you are in the position to pursue a raise, and are granted one, consider saving the extra money in a savings account for the purchase of a home.
3. Pick Up a Side Job
We are in the era of the side hustle, no matter our economic background or generation. Some of the boomer generation are making money on youtube making videos about garden renovations and home decor. Some millennials are picking up extra change through streaming. There are practically dozens of options when it comes to side jobs that can earn you extra, savable income as you work towards your goal of buying a home.
4. Make a Budget that Makes Sense
Take a look at houses that are currently for sale and use a house payment calculator to estimate what kind of down payment you would need, what payment plan and loans are the best for your circumstances, and so on. Use this information to create a comprehensive and time-dependent budget. While we can’t all anticipate being able to afford a multi-million dollar mansion, it is possible to take a direct and mathematically-backed approach to figuring out how and when you can purchase a home.
Owning a home is unfortunately a privilege in the western world, and even for those to whom it is in reach, the process of saving can be daunting. Take it one step at a time and remember that life is long, and homes are plentiful.