Getting a house is more than just a status symbol. Of course, one of the main reasons why you’re breaking bones is to have a nice roof over your head, right? Although we have different types of government programs or loans, it’s still better if you rack up the down payment by yourself. Moreover, this trains you to save money even after you’ve given the down payment for your house. So can you really save up an amount that could pay off the down payment of the home you’re eyeing on? The answer is a big YES, here’s how.
Read: Commercial Bank, Pag-IBIG, and SSS Housing Loans – What Are Their Differences?
First things first, of course you need a job. Or not a job as long as you have a reasonable amount of income; may it be per week or per month. The important thing is that it has to be there. Hell, how can you save money if you’re not even earning? If you’ve got that in place…
How can I save money for a house down payment in less than two years?
Here in the Philippines, it’s not like saving is impossible; it’s just that a lot of things has changed and became more expensive but that shouldn’t stop you from achieving your dreams.
Know what your expenses are
First thing you need to do is to distinguish what’s taking a big part of your income. Is it from monthly expenses? From your hobbies, and wants? Once you determine what’s eating up a chunk of your earnings, then try and weigh them all down. If you can cut them down whether it’s from your utility bills, from your daily transport/gas, have a limit to those so you can focus on your savings. It’s not like you’re taking a part of your life, it’s just temporarily so you can reach your goal of a house down payment.
Set your goal, a realistic one
New home buyers often forget that they don’t actually needs millions to make a down payment of a house. Gerri Sexsion, president and CEO of Jax Federal Credit Union, gives the advice of ultimately being keen on how much a down payment of the house you’re eyeing on costs.
A lot of people are not aware that they do not need a total of 20 or 30% of down payment if they’re aspiring to purchase a house or a property. There are different programs that could actually just require you to pay 3-4% of the total cost of the house upfront.
Forget that you have a credit card
If you have a credit card, then you now really know how much living costs. Having a credit card opens the door of opportunity to a ton of expenses. Online shops and website subscriptions that you’re always a fan of but don’t really need? Try avoiding them. Better if you remove your credit card from the websites that consume you ’til the very end.
Although buying something that is not a huge amount won’t hurt, but have you ever thought about buying those maybe twice or three times a year? How much savings have you accumulated if you just cut back from buying things that aren’t life-and-death situation?
Automatically set ten percent of your salary for your home investment
There are a lot of techniques and strategies in saving. One of which is the 50/30/20 budgeting technique. Although this can be applicable to the situation we’re in, you can tweak it a little bit if you’re focusing on just saving up for a down payment of a home. Say for example your monthly net income is around Php18, 000.00, ten percent of that is Php1, 800.00. Say you have a consistent saving pattern that you’re able to save that amount per month. By the end of the year, that would be Php21, 600.00 just from that 10% each month.
Imagine if you make it 20%, how much would you be able to save?
Read: How can a Filipino Student Save Money Effectively?
Cut back from vices
If you smoke, a pack of cigarettes today cost somewhere around Php100. 00 in convenience stores. If you buy a pack twice or three times a week, that would go up to Php300. 00. In a month, that’s almost a thousand pesos; imagine what you get from smoking. Does it do you any good? No. Smoking only kills you so try cutting back from it.
It is definitely understandable that some people couldn’t quit in an instant. However, it takes guts to do it and of course discipline. Try cutting back from smoking by just buying a pack for two weeks to a month, you will see the difference and it CAN be the reason on why and how you’ll quit the bad habit.
Add a source of income
If you have a job, kudos to you. You would be able to apply everything we’re talking about here. But imagine if you have an extra string of income, wouldn’t it be a lot better? In starting a business, you don’t necessarily need tens and thousands of pesos; what you need is an idea, a plan, a habit that you like to turn into a money-making machine. There are a lot of opportunities for business especially if you’re desperate.
In addition to that, it doesn’t necessarily have to be a business. If you can work extra hours per day by doing other thins than your job, then go for it. But of course, don’t escape and avoid rest as it can lead to worse, major problems that can cut your savings.
Read: Small businesses you can start next week at your home
Make your dream home the wallpaper of your phone
Positive reinforcement is the key; motivation can drive your dreams to success. By putting your dream house as a background to something that you look at 80% of the time, you will remember what you’re striving for. By thinking of this, you will be able to identify everything that revolves around what you’re aiming for: house down payment. You will not believe that this is effective unless you try it.
Cost to action
Everything is mental; this is why approaching your savings in a more mental concern can actually be an effective way. Try labeling everything you’re doing wrong as something that would cost something. Say if you smoke and you buy a pack of cigarettes, put Php100. 00 in your savings; if you argue with your partner, put Php500.00. Try having a cost for every single time you do something out of the norm, it may surprise you how effective this technique is.
Although you’re the only one setting the goal, you need to ensure that you stay true to it. Cheating with your goal is just you cheating to yourself so ensure that you stay true and keep it real.
Lastly, eyes on the prize
Everything you do must be in complement to your goal. Whatever it is you are doing, never forget what you’re doing it for. This doesn’t just apply for a house down payment, it can be for something else: a business, a car, a dream vacation, or whatever. All you need to do is to discipline yourself. Besides, you will be able to carry this out even after you achieve what you’re saving for which is actually the good thing about it.
Buying a house isn’t cheap – of course it wouldn’t. However, reaching the goal is feasible, you just have to persevere and stay smart. Don’t let little things ruin the big picture. What you’re saving for is your SOON-TO-BE-HOUSE anyways s it’s actually worth the wait.