How to Save Money For a House

Today's market is a rocky place to be. If you haven't started saving already, there is no time like the present. As credit markets tighten and housing prices fall, take advantage of having a nest egg of savings ready for a down payment. Create that nest egg and save money for a house by following a few simple tips.

Instructions

1. FIND YOUR LIMITS

   Find out how much house you can afford based on your income and your budget. The days are over of 'creative financing,' so be realistic about what you can and cannot afford. Go online to find current home loan interest rates to figure an estimate of what is possible.

2. MAKE A PLAN

   Once you know what you need to save for a reasonable down payment (10-20% of total purchase is usually the minimum unless you qualify for a specialized government loan or opt for more risky terms) get it down on paper or set up in an Excel spreadsheet. Writing everything down will create a better sense of control for you.

   Figure out how long it will be before you logistically purchase a house. Are you giving yourself five years to save? Are you in a rush and already have some money stashed away? Do you have a lease term that needs to be fulfilled first?

   Divide the amount of money you need by how many months of savings you are allowing yourself. This will give you the approximate amount of money that you should be saving per month.

3. PRIORITIZE

   Saving money for a house means making sacrifices. In a world of instant gratification this can be the most difficult part but it is essential and the payoff is better than any big screen TV or vacation to Maui.

   Depending on how much money you have in surplus every month you may need to cut back on spending. Take a look at your budget and cut out the things that you may not need or want when compared to the satisfaction of being a homeowner.

   Put notes on your credit cards with post-its reminding yourself of the big prize ahead "REMEMBER THE HOUSE FUND!"

4. KEEP YOUR GOAL ALIVE IN YOUR MIND

   Search for homes for sale and look at decorating magazines, remind yourself always that there is a reason that you are making sacrifices. Declining a night away in a great hotel won't be so bad if you spend the evening planning out a new furniture design or how your garden bed will look once you find that perfect house.

Tips & Warnings

• Buying a home is fulfilling and satisfying, it's worth the hard work!

• Always consult a financial advisor if you are confused about any aspect of purchasing a home.

• Follow all state laws regarding purchasing a home.

Resources

• eHow Article - How to Start a Budget
• eHow Article - How to Teach Your Family to Live on a Budget
• eHow Article - How to Live on a Budget and Like It