Growing up did you have a playhouse, a treehouse, or a fort in the woods that you and your friends made? A place that you could go to get away from the world? As you grew up did your ideal dream home change shape and location? Do you picture yourself:
Sitting in the porch of your abode, you take it all in…
The beauty of your surroundings….
The brilliance of the structure you are sitting on- a dream that you worked hard to build.
Everyone has a similar dream. An ideal house that they want to build for themselves and their loved ones. An abode to grow old in. Yet, when you are young and struggling, realizing this dream can seem quite hard.
With every passing year, it is getting more and more expensive to afford a quality life. According to Statista, 2020 will witness the rise of inflation to 3.56 percent. This is an increase from 3.41 percent in 2019.
Similarly, house prices are also increasing in most countries. This is best depicted by the graph below, as provided by the IMF.
Does this mean building your dream home is nothing but a pipe dream?
Here are some tips you can follow to save money for your dream abode.
1. Get a valuation for your current property
When saving money to build your dream home, you must first identify the estimated amount you need to save in the first place. Apart from your savings in the bank, there is a high likelihood that you will sell your current property when you get a new one.
So, it is essential to know the market value of your house. Remember, this value will not remain the same. But, it will give you a rough estimate of how much money you can generate from its sale. When you eventually do decide to sell your current house, peruse the best tips for selling your property quickly. This will allow you to quicken the process.
2. Cut down on your leisure expenses
According to a report released by the US Bureau of Labor, in 2018, an average US consumer spent over $61,299. And out of this, $3,226 was spent on entertainment and leisure. In other words, this is the amount that could have been saved.
Entertainment is an important aspect of life. It helps in relaxing your mind and rejuvenating your soul after a hectic day at work. However, making a few cuts in this facet of life can allow you to realize your dream of building a dream home much sooner.
For instance, let’s say you are a book worm. Rather than purchasing the hard copies of each book that you want, consider going to the library and lending your desired books. If you like listening to songs, rather than purchasing them off of Spotify, make do with playlists available on YouTube.
Wait a few days after the release of your favorite film before you visit the theatre. Generally, ticket prices are higher during the first week of screening. Such small measures can help in increasing your savings.
3. Split and save in two different bank accounts
One of the most significant deterrents to saving up is knowing how much money you have in your bank account.
Think of it this way. You walk by something you don’t need but definitely want. Technically, you don’t have the budget for it. But, your card does have enough money to purchase it since your savings are included in your bank account too. In a moment of weakness, you end up buying the product!
Wouldn’t it be much less torturous for you if you just didn’t have your savings in the same bank account you use for other expenditures?
This is why it is advised that you split your salary into two accounts. Get a savings account that inhibits withdrawals until a specific time has passed. Decide how much amount you wish to save monthly and deposit the money in your savings account accordingly.
4. Search Extensively
Don’t get swooned away by the first house you see. Instead, while you save money, do thorough research about the different houses in the area.
A great way to save money is by purchasing a cheap house with great potential and then renovating it as you like. Depending on how cheap you get the house for, you can end up building your dream house for a lower price than what you would have paid for a completely built and renovated abode.
So, when saving money for your dream house, start by researching about prevalent house prices. Set your eye on a property that offers you the most value and satisfaction. Then, save accordingly to purchase and maybe renovate it, if need be.
5. Use your windfalls strategically
Those affiliated with the financial sector might be familiar with the concept of “Windfall.” This is a word coined for the extra money that people earn or get apart from their monthly income. This can include yearly bonuses, holiday bonuses, checks from family members on birthday, income tax refund, etc.
Generally, when you get the cash that you were not expecting to, the first reaction is to go on a shopping spree or splurge it all on a fun vacation. But, if you wish to purchase a house, stash that money away and use it for a down payment.
While splitting your income into two accounts and cutting down on expenditures can help you save money, none of these amounts are enormous. But, windfalls generally are. You must leverage it all.
Also, it is the human psyche to either not spend their windfalls at all or splurge the entire amount. It is quite to stop yourself once you begin spending the money. Therefore, it is advised that you put the entire amount aside the moment you receive it.
Watch your dream home turn into a reality
Even though the economic and financial conditions of the country and the world might signal, otherwise, you can still build your dream home. Depending on your financial status, it might take some time.
But, with effective saving strategies, you will get there one day.
Don’t give up. Learn to control your spending urges. Be realistic about your dreams, and you will soon be the owner of the dream home you always wanted.
ABOUT Alycia Gordan
Alycia Gordan is a freelance writer who loves to read and write articles on healthcare technology, fitness, and lifestyle. She is a tech junkie and divides her time between travel and writing. You can find her on Twitter: @meetalycia