There’s no denying the fact that buying a home isn’t as easy as it once was. The statistics speak for themselves: back in 2004, 69% of Americans owned a house. However, that number is down to 63.4% today. Buying a home clearly takes a high level of focus and financial planning, and it often helps to have a savings strategy in mind. Here are just a few savvy strategies to keep in mind to help you save up to buy a home.
Start Tracking Your Spending
This is a great way to not only save up for any purchase but to determine where you’re spending the most money and where you can make cutbacks. It’s an especially important savings strategy when buying a home. Currently, 1.24% of mortgages are delinquent, and once you have a mortgage, it is l imperative to keep up with your mortgage payments and your other bills. Fortunately, there are plenty of simple ways to track your spending with the help of trustworthy technology.
“Spending even a few dollars at a time on luxuries or convenience items can really add up. Finding out where your money goes is the first step in figuring out how to keep more of it in the bank,” says Trulia.
Set Up Designated Savings Account
Once you’ve tracked your spending and set a realistic budget based on your expenses, it’s best to open up a separate savings account dedicated to your down payment — and only your down payment. Once deposited, consider all money in the account as strictly off limits until it’s time to write the check for your down payment. You should also consider setting up an automatic deposit that adds the amount of money you choose into the account each week or month.
Understand that All CDs Are Not the Same
We have been in a low interest rate economy for some time, but rates are definitely on the rise. With that in mind, it makes sense to avoid entering into a long term CD if rates are going to rise. However, the shorter the term, the smaller your return. So determine your time frame, then choose the CD with the highest rate with a minimum deposit that’s within your budget.
For more information about savings options that will help you purchase a home, contact First Bank of the Palm Beaches.