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How to start saving for a house

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How to start saving for a house

Buying a home is, without a doubt, one of the biggest investments we make in our lives. Despite the fact that, in the vast majority of cases, it is possible to buy by means of a mortgage, the initial investment for the purchase of the house is usually considerable. In this post we bring you the 10 keys on how to save money a month and achieve the dream of buying your own home.

How to save for your dream home

These are 10 practical tips that do not involve depriving ourselves of all the whims and tastes that we like to give us but acquire a greater awareness of our buying habits and adapt them to our goal.

How to start saving money

1- Save money month by month by setting a goal

In order to save money each month to buy a home, you must first set a realistic and concrete savings goal.

First, to save money each month we have to set the final amount we want to get.  More or less, it is advisable to have between 25 and 30% of the cost of the property. This money will be used to pay taxes, the opening commission of the mortgage in case you can’t make a 100% mortgage, and the deposit contract. Calculate approximately how much money this would be in your case.

Having a fixed objective is the best way to save, as it will allow you to calculate how much to save each month.

Where should i keep my money while saving for a house

2- Creating a bank account for savings

Having a separate account to save for a home will avoid unnecessary temptations.

Once you know how much to save, there comes the matter of how to save money each month to achieve your ultimate goal. Create a separate bank account to enter the amount you want to save each month. Enter your savings fee into this second account at payroll time. This way only what you have decided to spend will remain in your checking account, and you will not be tempted to spend your savings.

Try to have a reserve of money, so you will be covered if any unforeseen event occurs.

3- Study and analyze your consumption habits and your fixed expenses

Subscription to Streaming services is usually a common fixed fee among our consumer habits.

Analyze your consumption habits, especially the fixed fees and small daily expenses. Ask yourself, do I really need to have Netflix, HBO, Amazon Prime and Canal Plus? Or can I do without any of these services? Other fees such as the gym membership or monthly subscription to a magazine or cosmetic box should also be considered. Be sure to make the most of any fixed costs you have. If you are not taking advantage of it, eliminate it and find an alternative.

Small daily expenses usually add up to a substantial amount at the end of the year. For example, your 5€ daily breakfast at the café next to your office will cost you around 1200€ at the end of the year. Making small changes such as having breakfast at home or limiting the number of times you buy coffee during the week will save you a considerable amount at the end of the year.

4- Learn new skills and #doityourself

Simple skills such as cooking or sewing will allow us to save a significant amount at the end of the year.

Learn to do things yourself, like cutting your (children’s) hair, painting your nails, fixing broken zippers, changing a light bulb or making your own toothpaste. This way you won’t need to buy it or have to hire anyone to do it for you, and every month you will be able to save directly all the money you would have spent for these purposes.

5- Avoid debt

Today you can get a loan even to buy a couch or a TV. Avoid debt at all costs, because it always has interest.

Nowadays it is very easy to find services that finance the purchase of any object that costs more than 500€. Bear in mind that all financing services are loans and therefore have commissions that you will have to pay along with all your fees.

6- Familiarize yourself with second-hand purchases

Second-hand stores are a good place to look for quality furniture or clothes at lower prices.

Discover the world of second-hand shopping. Although not everything you can or want to buy used, this is a good option for buying furniture, clothes, cars or even telephone or computer items. A secondhand car in good condition, such as a used car at a fair or a km 0 can cost 2,000 less than a brand new one. Also, with a bit of skill, you can get a solid wood table for about 300€; which you can leave better than new with a good filing and a coat of varnish. On top of helping your pocket, you are protecting the environment by reusing and repairing products.

7- Purchase quality

Do you know the saying, „cheap gets expensive“? Buying quality products is always cheaper and more sustainable than buying at a low price and lower quality.

For everything you can’t buy second-hand or repair, make sure you buy quality products, because they will last much longer than a cheaper one. This is a saving in the long run, which will be reflected in the cost per use of the product: the more you use it, the lower the cost per use, and the higher the quality, the more you are able to use it.

An example can be found in clothing: it is better to pay 60€ for a good pair of jeans than to replace 20€ trousers every 6 months. Furthermore, buying with an investment mentality is much more sustainable for our planet, as for example, fast clothing is incredibly damaging for our environment.

8- Also invest in your leisure time

It’s better to eat out twice a month „in style“ than to go out four times a week and pick the cheapest.

Use this investment mentality with your leisure time too. It is much more pleasant to go out to dinner a couple of times a month „in style“ than to go four times a week trying to choose the cheapest so that the final bill is not so expensive. Besides, this way you will enjoy these occasions much more.

9- How to save money by avoiding paying in cash

Paying by card allows you to have greater control of your expenses.

Always pay by card and check your expenses at the end of the month. Paying by card will allow you to print at the end of the month all the expenses you have had. This way you can control what you spend your money on and eliminate unnecessary expenses.

10 – Find a second source of income to save money

Getting a second source of income, if it also boosts some of your skills, is a double gain.

If your occupations allow you to do so, find a way to get a bonus. Be creative and find out how you can earn an extra every month. You can babysit the neighbors, sell cakes or cookies (check the legislation for selling food before you do this), do photo shoots, run a small business‘ social network, or coach the neighborhood soccer team on Thursday nights. All the money you earn from these activities can go directly into your savings account.

How to be patient when saving for a house

Remember that saving for a house takes time, so be patient. Saving is a habit, so don’t despair if you find it hard to follow these tips at first. When it comes to buying a property, a big quantity needs to be saved, but these tips can help you for any kind of dream/products/service you are saving for. Balecy supports you in your journey of keeping your economic sustainability afloat. Furthermore, saving often means choosing a more environmentally friendly alternative. This means that not only you will benefit, but also our planet.

Start today with your first savings challenge and learn to #doityourself, go to a second-hand store to buy that item you are missing or, in the best case, look at all the things you have at home and repair the broken ones before buying new ones. Keep in mind that no consumption is better than any type of consumption in terms of the monetary and environmental resources needed.

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