6 tricks to successfully save for a home
July 15, 2016 | 11:16am
MANILA, Philippines – It’s easy to own a home when you have the money. But for most Filipinos, gathering up cash for the down payment is a real challenge, especially if you have debts, lots of bills to pay, rent and other monthly payments on your shoulders.
While saving for a home is not that easy, don’t think it’s impossible even if you think you’re not yet earning enough.
The key is preparation. Whether you’re looking to purchase a property in a couple of years or making the investment 10 years from now, you should save up as soon as possible.
There are also several ways to make saving for a home easier and sure.
1. First, find out how much you need to save
First things first: Set your goal amount. Do some math to find out how much you can really afford. There are different rules of thumb on this. One is the 28 percent rule which says that your monthly amortization should not eat up more than 28 percent of your monthly take-home pay.
Another rule states that the price of the home you can afford should be 2.5 times your annual salary. Online home affordability calculators can also help.
Once you determine the total purchase price you can afford, you would know from there how much you should set aside every month to build your home fund.
2. Be ready to sacrifice
Buying a home is never cheap. If you seriously want to become a homeowner someday, you would need to cut back on several expenses as you save up. This could be the most difficult part because most likely you might have to alter your lifestyle a bit.
Slash your spending on wants and luxuries and prioritize your needs. But don’t make saving for a home an excuse to forget about giving for a good cause, helping your loved ones financially and pursuing your other passions.
3. Know where your money goes
Do you normally save money? If it is a habit that you’ve yet to develop, you would need to be more intentional about monitoring your finances. Control your expenses and use an efficient app or create your own Excel sheet to make sure you’re strictly following your budget. This will also help you clearly see which of your expenses are categorized as needs and which are purely wants.
Being on top of your finances this way is necessary to ensure that you’ll successfully keep enough cash for your own home someday.
4. Use your windfalls very, very wisely
Let’s talk about bonuses, commissions, extra income, or what have you. It feels great to receive a hefty amount of cash sometime during the year. But before you immediately think of spending money on gadgets, clothes, signature bags, or traveling, ask yourself whether it’s the wisest thing to do. If you’re trying to own a house someday, wouldn’t putting much—or even all—of your windfall to your home fund be the wisest thing to do?
5. Get more cash
You might also need to earn more cash to expedite your fund-building efforts. In that case, you can consider getting a part-time job if your current job, time and energy permit. You can also rummage in your garage or room for old stuff you won’t be using anymore and turn them into cash.
Some people who own two cars had to sell the other and others sell some of their gadgets to have more money that they can put into their home fund. If you have a passion project, you might want to consider using that to earn extra money.
6. Be patient
Patience is still a virtue even in the context of being a homeowner wannabe. Unless you’re super rich, you can’t own a house in one day. Building the fund also takes a while. But this does not mean that you can’t aspire to own a home until you’re earning hundreds of thousands of pesos in a month. Just be diligent and disciplined in saving up and you’ll reap the reward someday.
Find with Empire East the perfect home for your pocket and lifestyle. Contact Empire East at its main office through landline number 810-3333 or email inquiry@empire-east.com. Learn more at facebook.com/empireeast or follow twitter.com/empireeast and instagram.com/empireeast.
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