Purchasing a home comes with its challenges. The financial challenges including saving enough of a deposit to be accepted for a mortgage pre-approval, then maintaining this until you go unconditional, and finally, budgeting to afford mortgage repayments and all the additional bills.
Imagine living in your dream home with the style and space you’ve always wanted. Getting home at the end of a long day, kicking your shoes off and relaxing in the comfort of your own home. It can’t get much better.
Here are some lifelong tips that will help you maintain that dream lifestyle…
Put a budget in place to save for the deposit.
The bigger the deposit, the smaller the repayments. Essentially, working hard to save before purchasing your dream home will make it significantly easier for the lifetime of the loan due to the interest that will accrue.
For this reason, you should budget out a set amount of money to put away specifically for your dream home at every time interval. There are many ways to budget, and each type suits different people. For instance, you could budget on a weekly basis or a monthly basis.
Keep in mind, nothing is stable. Your financial situation will change over the course of saving for your dream home, usually for the better. Think pay rises. However, you should always be prepared to face the worst case scenario and accept that your goals could be put on hold by a year or two, if you are faced with big unexpected bills or job loss.
Boost your income.
When there’s a will, there’s a way. Don’t just utilize your primary income to save for your dream home – there are always things you can do on the side that will put more money in your back pocket.
If you’re in an industry where you can’t do extra hours or do freelance work on the side, you can take matters into your own hands. Buy second-hand items and sell them for profit online. Make candles or soaps on the side and sell them at the markets or online through local social pages. There is always something.
Do your research and ensure the financial gain is enough. Once you find your niche and test and trial, you’ll be able to bring in a steady side income.
And if you can, freelance work is a really lucrative technique to save more. Freelance work usually pays a significant amount more than your usual pay due to the fact the entire pay goes straight to you as opposed to being filtered through the company you work for.
This is a universal tip that should be used at each stage throughout the home purchase and home owning process. Spending money willy nilly will not allow you to afford your dream home. You simply won’t have enough money left to pay the hefty bills that come with the dream.
Cut down your spending habits so you allow yourself a set amount for leisure time or entertainment each week. And cut all other spending on items you don’t need altogether. Clothing, technology, beauty products – only buy items if you really need them and before you purchase, see if you can either borrow or repurpose items you already own. Trust me, keep the big picture in mind. It’s your dream home, after all.
Always view spends as a whole, not as individual expenses
So, you nip out of the office to grab lunch two days a week. $40 a week may not seem like much, but if you calculate that over the year, that’s $2080. And if you’re spending three years to save for your dream home, that’s $6240. Add this to other small spends which accumulate to other large spends and it adds up to tens of thousands dollars.
For this reason, always calculate spends for their entirety over the course of the year as opposed to one-off spends. This will make you rethink – is this spend really worth it?
Use an excel spreadsheet to budget your expenses
Excel sheets are usually utilized to visualize spending. You can either create one yourself or find templates online which are usually easier to use and understand. Start out by putting in your outgoing expenses that can’t be compromised or lowered as they are a set bill. These include mortgage repayment, electricity bill, water bill, internet bill, phone credit, and more.
Purchasing your dream home and making repayments can be difficult, but it is all worth it when you get to reside in the home you’ve always dreamed of.