Now that the housing market has rebounded and with interest rates relatively low, this is a very good time to consider buying a new house.
And the best time to start saving for that big purchase is, well, yesterday or last month or, better yet, last year. But it’s never too late to start if you use these 6 ways to save money to buy a new house in Minneapolis.
6 Ways to Save Money to Buy a New House in Minneapolis
1. Create a Budget
Most people simply don’t know exactly how much money they spend each month and what they spend it on. Creating a budget will help you honestly assess where your money goes and where you can save. With a monthly family budget, you can determine exactly how much you need for food and bills and the like and how much you can set aside toward buying a new house in Minneapolis.
2. Set Up a Dedicated Savings Account
Another of the ways to save money to buy a new house is to set up a dedicated savings account for the purpose. You deposit the money you save for your new house in this account and then “quarantine” it from spending. This money is then off-limits and stays in the account no matter what.
3. Save 100% of Windfalls
Suppose you receive a small inheritance or a bonus at work or a cash birthday gift. You save 100% percent of these windfalls by putting the money in your dedicated savings account. So when you get bigger income tax refund than you had expected, don’t go out and splurge and celebrate. Save all of it.
4. Downsize and Downgrade
If you really want to do what it takes to buy that new house, you might consider downsizing in your residence. Moving from a two-bedroom to a one-bedroom apartment can save you as much 20% to 30% on rent. You also might consider trading down in what you drive. In many cases, a functional compact will serve just well as that gas-guzzling SUV, and the payments will be considerably lower.
5. Contribute Less at Work
Many people may not want to do this, but it is an option. If you contribute to a 401 (k) at your job, you can contribute less and put the savings toward your new house in Minneapolis. Sure, you’ll still want to contribute enough to get the matching employer-contributed amount. Just don’t go over that.
Keep in mind that a house is also an asset. It appreciates and grows in value the same as your retirement savings would. It’s just a different way of achieving the same end, and you will have control of the money while you’re saving it yourself.
6. Work More
We’ve saved the least popular of the ways to save money to buy a new house for last. And that is simply to work more – whether additional part-time jobs or just longer hours at your job. But if you want that new house bad enough, you’ll do whatever you have to do to realize that dream.
So if overtime is available at your job, take it. Or if that’s not an option, you could get a part-time second job. It may not seem like you’re making much more for the extra effort, but it adds up over time.
If, after putting into practice our 6 ways to save money to buy a new house in Minneapolis, you’re still struggling to come up with a down payment and wondering how to make monthly mortgage payments, don’t despair.