There is hardly anything more satisfying than becoming a homeowner; it’s not just mortar and bricks, but it’s a dream come true and the product of years of planning. While the majority of the payment is taken care of by a home loan, you need to save up judiciously for the initial down-payment of your home. Remember, the larger the down payment, the lower the home loan needed. Your strategy should be to start young and tuck away a percentage of your income every month. Here are some tips to help you get there:
Start a dedicated fund
A dedicated monthly savings account for funding your dream home should be part of your financial plan. Be realistic when creating your saving strategy so that its easier to follow. The money saved can be multiplied further by judiciously investing through various available tools. This could be in the form of mutual fund investments through SIPs, provident fund, recurring deposits or post office schemes. You could also consider tax-free equity schemes which have lock-in periods and good returns on investments.
Aside from your saving for your home, you should have an emergency fund in place for those unexpected situations in life too. Having an emergency fund will ensure that your home fund stays intact and untouched.
Cut down on expenses
You don’t really need to splash out on a big expensive car, that large-screen TV or an elaborate vacation every year while you are still trying to fatten up your home fund. Other seemingly smaller expenses such as eating out frequently, visiting bars or splurging out on clothes, jewelry or gadgets will only end up creating holes in your bank account.
Shopping online helps you compare prices and get better deals, hence you end up saving big if you are into e-commerce. Almost everything is available online from medicines to clothes, grocery, gadgets and even furniture!
Rent smaller homes
Another way you can save for your home fund is by renting smaller-sized homes. Living small is a smart move. However, remember to cut down on expenses, not put a lid on them. You can still save money while enjoying your life!