person with notebook and calculator building budget and saving money for a new home

If you are looking to purchase a new home currently or within the next few years, it’s time to start saving! Saving money for a new home can be stressful and overwhelming and many new homeowners are not sure where to begin. So, we have compiled a list of tips to encourage you to start building your budget and saving money for a new home. 

Re-evaluate your Current Budget

Before you can start saving money for a new home, first you need to take a good look at how much money you have coming in and where it is going. Start by creating a budget and make sure to account for all of your income and expenses, even your morning coffee fund. Once you build a budget, it will be easier to track over the next few weeks, months, or even years depending on when you are looking to purchase your new home. 

Eliminate Unnecessary Spending

Once you begin the process of saving money for a new home, you can see where you are making unnecessary purchases or what things you are spending too much money on. You can cut some extra coupons to save more money at the grocery store, or you can cut back your morning Starbucks run to once a week instead of three times. Making these minor changes to your budget will help save you quite a bit over time. 

Pick Up Extra Work

Asking for overtime or more hours at work can also help with saving money for a new home. If your job doesn’t allow you to do so and you have extra time throughout the week, you could also search for a part-time job or small freelance projects to provide you with extra income. 

Sell Old Stuff

Another great way to make some money is to sell some of your belongings. You can go through old clothing to sell to a consignment shop, sell items on Craigslist or Facebook Marketplace, or host a good old fashioned garage sale. Make sure to put whatever money you make aside and save it for house hunting. 

Pay Down your Debt

If you have an active balance on loans or credit cards, paying down your debt can help you with saving money for a new home. While it may not make sense for you to be putting money towards your debt instead of saving it, it’s actually very important to do so. Bank lenders and mortgage brokers look at your debt to ratio income when you are in the home buying process. Paying down your debt will help you to get lower rates and be qualified for more. We suggest putting some money each month into saving, and some towards paying off your debt. That way you are still working towards two major home purchasing goals. 

Do your Research

Lastly, when saving for a new home we suggest doing thorough research on home listing prices in the area you are looking at. Comparing prices of homes that are similar to what you like and in the same area, can help give you an idea of what you will be spending when you are ready to purchase a new home. This way, you won’t be blindsided and have an accurate number to budget and plan for when saving money for a new home.