Most of the people are aspiring to be a homeowner. And also they are not sure how to make it a reality. However, you may a person who is willing to save money to buy a house within two years. Therefore, “founderactivity.com” is offering you How to save for a house in two years in order to help you with this terrible task.
If you have set your self to save within two years, you need to manage your overall payments and costs. Though people know that a home is the biggest single purchase they have ever made, many first-time buyers underestimate the value of the money needed to buy their dream home.
Step #1: Figure out how much you need
As the first thing, you need to figure out how much you need to buy a house. for that, you can ask from a state agency or a person related to a similar field.
Therefore, as the very first thing, you need to select your dream house and calculate the average cost that you want for it. Figure out how much house you can afford. Not only that, make sure that you are saving money for two years. So within these two years price might be increased.
- In June 2020 the median existing-home price was $295,300
- highest median home value in the U.S. at $646,733 in Hawaii
- highest median home value in the continental U.S. at $579,332 in California
- lowest median home value in the U.S. at $107,064 in West Virginia
|State||Average Home||Median top-tier||single-family||Median bottom-tier||Median condo value|
***Price can change practically, This is only an average price in 2020
Check the credit score
After deciding what kind of home in which state you want to buy, you need to check your credit score. That means while you are deciding a house you will recognize how much you need to buy this house. If you are willing to pay a downpayment, then you need to save money for the downpayment first. So set your budget first before reaching them.
However, credit score usually includes where you are and whether your score is weak, fair, good, very good, or unique. You will also find information about your scores. Your credit score helps you understand how lenders look at your creditworthiness and what types of loans you can approve.
How to Check Your Credit Score
- Check through your bank or credit card company
- Try Credit Sesame for personalized financial tips
- Explore other free websites to find one that meets your needs
- Buy your score directly through FICO to get the score most lenders see
- Get your VantageScore as well to cover all your bases
Things affect to credit scores
- Your payment history
- Debt amount
- New credit amount
- Length of credit history
- Credit mix
Therefore, when your credit score is good you need to maintain it regularly. That means you might have implemented a complete savings plan from the beginning. So you don’t need to think about more to save your money. If you think that it doesn’t cater to your needs you can engage in a part-time job and save money.
How to maintain a good credit score
- Pay on time and in full
- Pay off debts when possible
- Find out what type of account you have
- Keep old credit cards open to maintain a long history
- Try not to accumulate credit card balances
If it is not,
On the other, hand if your credit score is not good, you need to implement proper planning to make it effective. So as that you can follow the things we mentioned below in the article.
Step #2: Think About Down payment
And also think about that if you pay a downpayment. So you need to calculate it also. And also it is the upfront payment you make to purchase a home.
However, the down payment is the largest cost of buying a home. Normally a downpayment can range 3.5%-20% of the total cost of the home. Not only that, it totally depends on your credit score, mortgage interest, and your current financial states.
If you can pay at least 20% of the total cost of your home, you will not have to pay personal mortgage insurance (PMI), which protects against lender default. If you have to buy a PMI, your monthly payments may increase significantly. So you can get better interest rates from mortgage companies and save your money in the long run. Followings are the options that you have to collect your down payment.
- Set aside savings from time to time
- Save your tax refund
- Ask the seller for the money
- Borrow from your parents
- Seek for the financing
- Use the retirement funds
- Look for the government programs
Step #3: Consider the Closing Costs
And also you need to consider the closing costs. However, your closing costs might be the inspection fees, property taxes, appraisal fees, escrow fees, lender insurance, recording fee and prepaid interest, etc. So you might need to pay the extra money directly to the lender. However, closing costs range between 2-5% of the purchase price.
Step #4: Plan your Moving Expenses
Next thing is the moving taxes. That means the money needed to make your new house a home. On the other hand, expenses that need to get your stuff there. However, the moving cost can vary within hundreds or thousands of dollars.
Step #5:Make a Monthly Budget
After you have planned the above things, you need to make your monthly budget related to the expenses. you need to build your savings by spending less than before you lived. So as that you might be necessary to calculate the new budget relevant to the two years.
How to Make a Personal Budget
- Gather all financial statements
- Calculate your income
- Create a list of monthly income and expenses
- Determine fixed and variable expenses
- Total your monthly income and expenses
- Make adjustments to expenses
So as you estimated the needed cost above, here you can summarize them and make your own budget for your financials. You can add to the savings part from what can you save money and how much.
Any financial goal starts and ends with your monthly family budget. It is important to be honestly and realistically about your spending habits and stick to your consistent plan as much as possible.
Therefore list out your monthly expenses check them from what can you save money. This Monthly budget sheet will help you to do that.
Step #6: Implement your Savings Plan
once you have made your budget plan you can implement your savings plan on work. Therefore, list out from what can you save the money. On the other hand, it means from what section you can reduce spending money. related to the average housing costs mentioned in the above table you need to save 400$ for a day within two years.
If you cannot save this amount for a day you can engage in the below tasks to save money.
01. Open a savings account
Fortunately, you no longer have to go to a bank to open a savings account. So as that many banks today offer online savings accounts that can be opened anywhere, anytime. In addition to being convenient, you can earn more interest on your deposits by opening an online savings account. once you have opened a savings account save all the money you earned from a part-time job.
02. Automate your savings
Once you have opened a savings account, be sure to automate it monthly. This way a portion of your salary will automatically go into your savings account before you are tempted to spend elsewhere. Therefore, it is profitable to avoid spending your paycheck on unnecessary items.
03. Stop partying
As you want to save money, stop partying for these two years. It is not a thing that discusses further, all you have been spending a lot on parties. Even though there is no reason some people partying, So stop this task and save money. Most of the people used to spend a night out at least once a week.
04. Cancel your holiday plans
Then you might be spending holidays on trips, picnics, etc. Therefore, cancel your all holiday plans for two years. Then you will be able to save some money. And also if you have an average-sized family you may expend a lot of money for the holidays. So just freeze your holiday plans.
05. Cut down on driving
When there is an instance you can cut down your driving fees. Because the monthly payments you need to maintain your private vehicle costs you a lot. And also you need to pay for gas, insurance, repairs, etc. Therefore, if you can commute or use public transportation, you save thousands every year. And also you might even consider selling your car and learning to live without one.
06. Get a Cheaper Place
If you are currently living in a rental, you can move into a smaller apartment that cost you little. On the other hand, if you are single you can share your room with a roommate. Therefore you can save a lot of withing two years by getting a cheaper place.
Step #7: Not Only savings, Get Extra Income
In order to earn some more money, you can take on a part-time or additional job on weekdays. And also you can change jobs. You can search for jobs near your state because it doesn’t cost you a lot. Therefore followings are a few high-paying part-time jobs that you can engage in.
|No||job||Average per Hour||Hours you should |
work per Day
|09||Take part in research||$150||3|
|10||Lend Money on Real Estate||$400||1|
The followings are some examples of the high-paying skills that you can develop in order to have a part-time job.
- Project management
- Mobile application development
- Cloud computing
- Artificial intelligence
- Sales leadership
- Analytical reasoning
- U.S. taxation
- People management
- Video production
- Audio production
- Financial planning
So the main thing is to consider your income if you can not achieve your daily serving target. it does not matter if you are doing a job or business. Focus on your Dreams and your income.
This video “Patrick Bet-David” explains to you “How to Make a Million Dollars a Year”. I believe this video will help you to get a great idea about smart earning and a creative way to open your million dollar door.