So, you want to buy a home? Saving and investing can get you there!
Set A Cash Goal and Reach It!
So, you want to start saving for a home, but don’t know where to begin? As a matter of fact, you don’t even know if you CAN save, given your current living expenses, credit card and other debt (let’s not even talk about those dreaded student loans), and social life. Well, COVID-19 has put a halt to much of the socializing. But what’s a millennial to do with all these competing demands on your coins?
First, decide how much cash you need and when you need it by. This might sound like a no brainer, but I can’t tell you the number of people that set out to “save money” but have not end number in mind. Without a clear goal, you’ll never know if you’ve reached it or not. Also, it’s motivating to have a known target you’re trying to achieve. For e.g., you can set a goal of saving $20,000 in 2 years. This is just an example, because the amount and timing is personal to your situation and depends on several factors. Two of the biggest needs to consider when determining your cash target are:
Down payment – (anywhere between 3.5% - 20% of the home purchase price)
Closing costs – (2 – 3% of your loan)
There are other costs you might want to include in your cash goal. Please check out season 1, episode 4 on our YouTube channel for more information on all the potential costs needed to buy your first home.
Now that you have set a cash target and timeframe, it's time to look at ways you can reach your goal. Stay tuned for part 2 of How to Save Up For Your Downpayment!
– Barbara R. Galloway
About the Author:
Barbara is the Amazon best-selling author of “Renewing Your Money Mind: How to Go from Common Cents to Kingdom Wealth.” She has an MBA in Finance and a BS in Accounting and has a passion for helping people become financially free.