Saving for a house can be pretty intimidating. Where do you even start? With so many expenses being thrown at you, and large ones at that, it is hard to see past the immediate costs.

The main key to saving is to keep visualizing your goal. If you have a clear picture of you holding the keys to your new home, then keeping your eyes on the prize will be much easier.

Along with painting that mental picture, follow these tips to reach your ultimate goal of owning your dream home.

Evaluate your spending
As with all goals, you need to evaluate the situation honestly. Look at your spending trends over the past couple of years, more specifically the past year. There’s no way to determine an effective and realistic budget if you don’t know what you are accustomed to spending. Start with fixed expenses, such as cable, internet, gym services and others; those are unlikely to change.

Move on to unnecessary expenses or item purchases. Does that extra pair of shoes bring you happiness or does it just make you more stressed knowing you just spent that money? Take these issues into account when evaluating your past spending.


Prioritize your goals and expenses
Once you’ve broken down your spending habits, you can determine what you need to save for first or what goal is most important to you. This also depends on the timeline of each thingor goal you’re saving for.

If saving for a down payment is the most important goal, then you’re set. But if saving for your kids’ college tuition is something that has to start soon to be enough down the line then you may have to split your savings.

Determine what is most important and what can be achieved first.

Separate piggy banks
This helps keep you from spending house money on college tuition money or wedding money or that cute black purse money. Open up a savings account that is strictly for that down payment.

If you really don’t trust yourself, open a bank account at a different financial institution so you can’t easily move money from one account into the other. Consider seeing if your work will allow a portion of your paycheck to be directly deposited into that separate savings account so you aren’t tempted to just keep it in one and spend it aimlessly.

Pay off those debts
Make a list of your debt, and don’t forget to include the interest rates on any loans or other IOUs that are on that list. Don’t rush or get overwhelmed – tackle it one at a time.

Start with the smallest debt or amount of money owed and work from there. It is OK if you can’t pay off your car immediately. No one expects you to. Pay off your little bit of credit card debt and move on. Even paying off the smallest amount will allow you to cross some debt off your list. You’ll work up to a house payment soon enough.


Realistic sacrifices
Take another look at your spending and compare it to your goals. If you can continue to spend what you were and still manage to pay off any debt you owe while saving for a down payment, then you can stop reading.

But for most people, you’re going to have to make cuts somewhere. Maybe you can downsize your wedding so there are fewer mouths to feed — find a place to cut back and do it, even if it hurts.

At first, saving can be scary and it comes with a heavy dose of honesty. Do you really need to charge yet another thing to your credit card? What it comes down to is realizing that the long-term goal of owning your own home is way more important than the small and immediate gratification from that impulse buy.

Just keep that visual of you in front of your new home in tour head and you’ll be fine.


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