If we compare gold, stock, and mutual funds, investing in real estate can be the best long-term investment anyone can make for the betterment of their living. Especially in the wake of skyrocketing property prices, the best investment you can make is investing in real estate only. So if you are planning on buying a house, 2022 is the right time for you. Buying a house is a lifetime decision that involves a huge amount. Despite the fact that home loans are easily available to facilitate and encourage you to buy a home, you will still need to save enough to pay for the down payments that will come around in the near future. Consider that these down payments and your monthly expenses and additional expenses such as property tax will be too much for you to handle.
We completely understand the situation where one dreams of having a house of their choice but face many challenges in arranging the money. If you set firm on the decision of buying a home early at the age of 22-25, then in hardly 5-7 years, you will be able to save enough to finance the purchase only if you follow the below mentioned steps.
1 Start small and build a better budget
Starting small is the first step to how to save money for buying a house. You should not limit yourself to focusing just on the looming down payment. Instead, you should start saving small before going forward to invest in a property, wait and cut back expenses and earn additional income. Decide by what time you want to buy a home and monitor how many months away you are from that aim. Just divide the amount you have by the number of months left. But if in case you are planning on taking a home loan, then always remember the thumb rule of not spending more than 25% of your net salary towards the mortgage. Apart from this, you can also consider having some sort of payroll savings plan. If you, for some reason, missed saving in a month, then next month, strive against the goal of increasing the saving rate.
2 Invest in profit earning
If you aim to build a corpus in the next 10 years, you need to start investing in different kinds of money instruments so that you can earn a decent amount of appreciation in a given period of time. You can opt for investing in mutual funds, FDs, PPF, etc. if you opt for mutual funds, then they will provide you returns between 10-18%, whereas PPF will offer an interest rate of 7% annually; it is also risk-free and can easily open an account with just Rs 100.
3 Monitor if you are eligible for PMAY-CLSS Scheme
Suppose you choose to opt for a home loan to finance the purchase, you can apply for the Credit Linked Subsidy Scheme (CLSS) eligibility under the PMAY. These subsidies get directly transferred to your registered account, which makes it easier for you to manage the monthly instalments.
4 Ask for a raise
Suppose you are stuck in a situation where a very little amount of money is left behind to save after getting paid. It is an indication that the time for asking for a raise is here. You can use the below-mentioned techniques to increase your chance of success.
Choose the right time- Start timing your salary conversation as it keeps you on your best foot for success. Don't ask the manager to focus on this issue while he is on a hectic project, supervising a meeting or when time is at a premium. But once the time of your annual performance review arrives, that's the best time you should ask for a raise. If the company doesn't offer this, you can ask for a raise after the completion of a big project.
Be confident- When thinking about How to Save Money for Buying a House, you need to be confident with your aim of having a house and confident enough to talk to your manager for a raise. Go with full preparation and gather performance data and results from the projects you have successfully worked on. Show your manager your inputs, ideas, and success rate of your current project as it will create a positive impact, and the manager will fear never losing you.
Your attitude should be right at the time of salary discussion when meeting with your manager. Let your manager see how you envision yourself in your company and how enthusiastic you are to take responsibility. Considering the right time and appreciation for your work, the time for your raise will shortly arrive.
5 Switch to other employment opportunities
In order to understand How to Save Money for Buying a House, you need to take as better options as you can get. If you can switch jobs and land a better higher, paying salary, you must do so to save money for your down payment. Look over the job posting sites and salary comparison websites to monitor if you can earn better money as compared to people who work in similar positions. If you figure out that your salary is below average, consider it time to use your findings as leverage to ask for a promotion or if you do not love it there, consider searching for higher-paying positions that you qualify for.
6 Skip the vacation you've been waiting for and save for your ideal home
We know exploring a new destination with your loved ones could be one of the best amazing experiences you can get. But unfortunately, vacations tend to be expensive; instead of engaging yourself in that, consider saving that exact amount as an investment to buy a home. When you store money for a down payment, you can also enjoy a stay cation in your own city with your loved ones and have a fancy time there.
If you want to know How to Save Money for Buying a House, you need to have a solid plan in place. Understand the concept of how much you need for a down payment. If you consider the above-mentioned points, you will be able to save your money sooner than you expected.