A reader asked me about how to save to purchase a home, when your money doesn’t allow much for savings.
That’s a great question. But not an easy one to answer.
We all know that saving should be a priority. But we have monthly obligations. So here are so general steps to achieve what you want (in this case a home).
- Track your spending – many people overlook this step. Trust me this is the most important step in achieving your goal. Write down every penny that you spend for at least a month. Track everything from the rent payment to purchase of the newspaper.
- Weekly (or more often) take your tracked numbers and put it in to a budget.
- Analyze where your money is going and make a plan to spend less. Even saving $5 a week will add up.
- Automate your savings goals and pay yourself first. You will learn to live off less if you don’t see it available in your checking account. You may want to unlink your checking and savings (or have them with separate banks).
- Lastly, look into home ownership programs in your community.
- Check out to see if you qualify for an Individual Development Account to save for a down payment.
While it’s hard to save money each and every month. It a necessary step in life to achieving your goals.