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Before you start doing anything about buying your own home or building one, you might need to take a deep dive into your current financial state to dissect and analyze your income and out-go, so you’re sure of making quality informed decisions based on your cash flow.
Below are our top tips on saving for a home while still renting one:
Determine Your Free Cash Flow Per Month:
Trust me this is not an easy task, firstly, write down all the money you make in a month and all the money you spend in a month. You will be amazed at your earning and spending pattern! Most people earn just from one or two sources but spend through many drainpipes, this typically leaves you with no free cash flow at the end of the month.
Start Saving Systematically:
The next step is to determine to start generating free cash flow by plugging the drainpipes where money is spent monthly, like full subscription cable for instance. Saving is more about balancing your wants and needs in ways that help put extra money in your account. Starting by setting up direct debits into your savings account is a good way to ensure you never miss your systematic savings. You need to also find a way to save on your rent while planning to build or buy a home.
Create a Budget & Stick to it (or at least try):
Sit down and do proper math of what your spending patterns should become. Then come up with an easy way to manage and track your spending to stick to the pre-determined pattern. Delayed gratification is a principle that helps a lot in this process. The simple rule is – before you spend, plan it for at least twenty-one days, If you still need it after then, it’s not a ‘want’ but a need!
Get a side-hustle:
When you simply increase your income, your savings too will increase. You could consider taking on some freelance work, selling products online, or some other online business.
Pay Your Current Bills on Time:
Making your current bill payments on time is an essential strategy to help improve your savings toward buying a home. Consider using automatic payments or payment reminders, as this will save you from any unnecessary issues.
Downsize Your Current Rented Home If Necessary:
While working on your home buying or building process, it could be that moving to a cheaper apartment from your current place would save you a significant amount every month, however, you must be sure to do the maths.
PRO TIP: Investing in a house could probably be the biggest buy you’ll make in your lifetime, so it’s wise to seek advice from a professional finance expert or mortgage broker to help you make good decisions and stay on the right track.
