Millennial Money: 4 Tips to Saving For a Home
Calling all millennials: are you tired of grandpa condescendingly reminiscing about buying a home for his five kids when he was twenty-two? Exhausted by the daily, “back in my day” spiel? Well, you’re in luck. Now is your time to shine. You’re ready to take the next step into adulthood and buy a home. Here are four tips for saving for a home. Heck yeah!
Now you just have to pay for it. To figure out on saving for a home without feeling like a big, useless baby, check out these four tips.
#1: Know What to Expect
How can you save if you don’t know what you’re saving for a home? Buying a house is no simple business, nor is it a one-and-done purchase. When planning your budget, make sure you’re taking these costs into account:
- The down payment on that home
- Mortgage payments (don’t forget about the interest rate)
- Monthly household expenses like utilities, parking, and insurance
- New living costs like transportation, groceries, commerce, or tuition
- Any extra fees associated with the area (like with a Homeowners Association)
- Extra gas expenses if you’re moving farther away from work or school
#2: Loop In the Whole Family
No one knows how to save for a house more than your old lady and your old man (or whichever old person you go to for sage advice). That’s why there’s no better way to get your savings game on than looping in the family for some good ol’ accountability.
If you’re buying with your SO, then create a shared spreadsheet, so you know you’re staying on track. If your big sis is especially good at managing funds, share it with her too—she won’t be afraid to remind you about your savings goals when you start eyeing that jet ski for too long (also, you don’t live by a lake. Oh? The swimming pool? Yeah, not a good idea…).
#3: Don’t Turn a Blind Eye to Your Finances
When you’re approaching a monumental purchase like a first home, watching your money closely becomes even more of an imperative. Make it a daily habit to check on your accounts and make sure your spending for that week isn’t threatening your big savings goal.
For money-monitoring that works, put these best-practices in place:
- Review your credit card statements every night, inputting that info in your personal expenses spreadsheet (which you can create yourself on Excel or on a budgeting app).
- Update your budget each month to account for modular expenses, like holiday shopping or intense Halloween costume-creating (you will win that costume contest this year!).
- Check your credit score frequently to make sure it doesn’t plummet suddenly. Monitor all your accounts and take note of suspicious purchases. If you see any, contact your bank and your credit bureau ASAP.
- Build your credit profile by making smart spending decisions. Bad credit or no credit? Consider getting a secured credit card to help improve your credit score or establish a credit history.
#4: Don’t Try to Keep up With the Joneses
While the expression more familiar to millennials might be “keeping up with the Kardashians,” the meaning still stands: don’t compare yourself to others, especially when it comes to real estate (or home decor; maybe don’t mirror your buddy’s inclination for waterbeds and lava lamps).
If your friend just bought a house for $500,000 and you’re barely scratching the surface at $100,000, don’t try to squeeze your financials just to keep up. A good home isn’t an expensive one; it’s one where you can make lasting memories.
Remember, the first step to saving effectively is setting realistic savings goals.
Be Patient—You’ll Afford Your Dream Home Eventually
For all the prodding and pressuring that you may feel from your family, your friends, or your SO to buy a house already, remember that the only person you really need to impress is yourself. Take your time with this process—it’s not supposed to be a short one. You will find the perfect home at the right time, and, with the right strategy, you will be able to afford it. Good luck, kid.
You got this.