How to Save Money to Buy a Home

Every time you use one of these money-saving steps, it's money in your house fund.

Instructions

Difficulty: Easy

Things You’ll Need:

• Financial Calculator
• Piggy Banks
• Savings Accounts
• Notebooks
• Writing Pens

1. Set up a special interest-bearing savings account to buy a home. Money only goes in; no withdrawals are allowed.
2. Take a fixed amount - 5, 10 or 20 percent, depending on what you can consistently afford - from your paycheck and put it directly into your savings account. Ask your employer to have that amount automatically deducted from your paycheck every pay period so you aren't tempted.
3. Pretend any windfalls that come along never happened. If you get a lump sum of money from a tax return or a gift, put it directly into your special account.
4. Go shopping for food, clothes or other items only when you absolutely need something. When you do shop, write a list and stick to it. Avoiding impulse purchases can save hundreds of dollars over several months.
5. Cut down on outside entertainment and eating out. Instead, stay home, rent a video and invite some friends over for a potluck.
6. Let your friends and family know you are saving to buy a home. Most will be very understanding about the fact that gifts and extras from you will be put on hold while you're saving. Don't forget to stash away the money you would have spent.
7. Remember that every penny counts. Drop all spare change into a bottle, and every month, put that cash into your account.
8. Get rid of stuff you don't need with a garage sale. Get a few families in your area to join in to increase the draw to your sale. The benefits are twofold: You get cash for your unneeded stuff, and there will be less to move when you're ready to buy your home.

Tips & Warnings

• If you have to buy a car, purchase a used car instead of a new one. Buying a car just two or three years old can save you thousands of dollars. Or, pay for repairs to extend the life of your current vehicle instead of getting a newer car. The cost of repairs will most likely be less expensive than payments or the cost of a newer car.