It’s safe to say most everyone would love to save money and grow their bank account. The challenge is knowing where to begin. Here are 14 easy steps on how to save money for a house.
1. Refinance Your Car
Consider refinancing your vehicle loan. Interest rates for auto loans also tend to fluctuate based on various factors, including the state of the economy. So contact a few different financial institutions and find out about the rates they’re offering. Dropping your interest rate by only a few percentage points can easily save you $40-$80 per month.
Make sure you don’t extend the length of your loan, though, which will actually cost you more money in the long run.
2. Negotiate Your Cable Bill
Cable companies are notorious for jacking up your rates. These companies will often offer you a discounted package for the first 12 months, then increase your bill after the deal has expired. Talk about frustrating!
To offset these costs, we recommend contacting your cable company directly. Let them know you’re considering switching to their competitor unless they reduce your bill. Since they don’t want to lose your business, they’ll likely help you out. If they refuse, switch to a cheaper provider if one is available.
3. Eliminate Debt
All of those small loan and credit card payments add up and cut into your monthly budget, especially when you also figure in the monthly interest you’re paying on them. Don’t worry; wiping out those small monthly bills is easier than you might expect.
We recommend targeting your smallest bill first. For instance, let’s say you have a credit card with a $2,000 balance. Instead of making minimum payments, start putting your extra cash toward settling that debt. Once it has been eliminated, take the money you were allocating to that bill and begin paying off the next smallest debt.
Eliminating debts through the snowball effect is one of the most effective ways to free up extra savings for a house.
4. Set a Savings Goal
While saving just for the sake of building up your bank account is admirable, it can be tough to stay motivated without a concrete goal. That is why we recommend having an end game when you first start saving. Setting attainable targets and deadlines can make it much easier to stick to your game plan!
When you’re choosing a goal, make sure it’s important to you and your family. Your target might be to save a 20% down payment for your dream home or put away enough money to go on an international vacation.
Whatever your reason for saving might be, stay focused on your “why,” and the rest will be easy.
5. Pay Yourself Before Your Bills
Many people make the mistake of paying all of their bills and then deciding what to do with the leftover cash. If you want to make saving money a priority, then you should pay yourself first. An easy way to do this is to set up a recurring transfer that automatically takes money out of your account every payday.
Before you set up your recurring transfer, you must have a clearly laid out budget. You need to know how much money you have left over from every check so you can decide what amount to save.
For example, let’s assume you have $400 after all of your bills are paid. A good starting point would be to transfer about half of this amount to your savings via an automatic transfer.
6. Spend Now to Save Later
This might sound a bit counterproductive, but spending a little bit of money on maintenance can actually help you save money over time. Contact your utility provider to request a home energy audit. If they do not perform them, search for a licensed contractor that offers energy efficiency reviews.
The report they provide will include all sorts of tips for improving the energy efficiency of your home. These might range from simple tasks like sealing off doors and windows to more involved projects like buying energy-efficient appliances. Making your home more energy-efficient can save you thousands of dollars over a few years.
7. Reduce Utility Costs
If you don’t have the extra funds to weatherize your home, you can still reduce your utility costs. Simply adjusting your AC’s thermostat and the settings on your water heater can help you save big bucks.
Your water heater is one of the biggest energy consumers in your home. To start saving, decrease the temperature settings on your heater by about 10 degrees. You will barely notice the difference, but your utility bill will.
To reduce heating and cooling costs, upgrade to a WiFi thermostat. When you leave for work, you can raise the temperature settings and set the thermostat to automatically begin cooling your home about an hour before you return.
8. Pack a Meal
Have you ever sat down and calculated how much money you waste eating out every single week? The total will likely shock you! If you’re a fast-food junkie, consider making the switch to self-prepared lunches.
Packing your lunch will usually only cost you $2 to $3 per day. For comparison, eating out can easily cost $10 to $15 per meal. With a bit of extra effort, you can save $100 a month or more.
Gotta have your fast-food fix no matter what? Choose one day a week to satisfy that craving.
9. Reevaluate Your Spending Habits
When you’re setting out to improve your saving habits, remember you’re working toward a long-term goal. With that in mind, we recommend annualizing your spending habits by converting a short-term figure into a yearly amount.
For example, let’s say you spend about $25 per week on drinks and snacks at work. It’s easy to write off this wasted cash as “no big deal.” Would you believe it adds up to $1,300 annually? That IS a big deal. Annualize your other spending habits, whether it’s weekly movies or an Amazon habit. How much more could you be saving?
10. Ditch Unused Automatic Subscriptions
We know that you love those Netflix and Hulu subscriptions. But do you really need four or five different streaming services that bill you automatically every single month? We didn’t think so!
Eliminating just a couple of subscriptions can save you $30 per month or more. While this amount may seem meager, it is still helping you move closer to your long-term goals. You could even split subscription costs with a friend or family member to save even more.
11. Cut the Cord
Speaking of streaming services, they are still far cheaper than traditional cable. However, many people still have cable service, subscribing to various on-demand services. If you’re ready to get serious about saving money, you need to cut the cord.
Pulling the plug on your cable service can easily save you $50 to $100 a month, if not more. You can immediately begin putting this extra money into your savings account or start paying extra on your credit card bills.
12. Go Generic
One of the simplest ways to start saving money is to go generic. Dump all of those expensive name brands and start buying the store brand alternative.
Hesitant to make the switch? Start with the basics like paper products, cleaning supplies, over-the-counter medicines, and dry food items like beans and rice.
The generic products cost much less than the overpriced brand names, and they work just fine. If you still have the receipt from your last grocery trip, bring it with you next time you head to the store. Swap out all of your brand-name items for the no-name variety and compare the receipts. You’re sure to notice a big difference in the total cost of your trip.
13. Spend Extra Cash Wisely
When you receive an unexpected bonus or raise, it might be tempting to splurge and spoil yourself. While we are all about self-care, make sure that you are spending this extra cash wisely. Instead of burning through your excess funds, set most of it aside in your savings account or use it to pay down your debt.
14. Review Your Insurance Rates
Been with the same insurance company for years but still seem to be paying unusually high rates? Shop around for a better deal! Comparing new insurance rates is entirely free to do, but it could potentially save you hundreds of dollars every year. You can easily roll those savings towards your long-term goals.
Let Agave Home Loans Help You Save Big
Now that you’ve learned 14 steps on how to save money for a house, there’s another area where a minor adjustment can lead to major savings: your mortgage rate. Learn the huge advantages of choosing a mortgage broker vs a bank. Interested? Agave Home Loans is here to help. Now is a great time to save. Contact us today to learn more!