Are you a Generation Zer? Have you thought about purchasing a home, but thought it wasn’t possible? A recent 2019 Homebuyer Insights Report showed that nearly 60% of 18-to-23-year-olds would like to buy a home within the next five years. It also reported that another 52% of Gen Zers have already started to save up to purchase a home. So, if you’ve thought about it, or maybe deemed that you couldn’t do it, think again, as we provide you with saving tips to buy that home sooner than you think.
Tip #1: Find The Right Savings Account For You
If you’re looking into a savings account, it is super important that you’re choosing the right one for what you’re trying to achieve. If you are in the beginning stages of saving, it might be best to get an account that doesn’t require a minimum balance, that way you can start to earn interest immediately, regardless of how much you have saved in the bank. Try to open an account with a high interest rate, and then you can earn more on the funds you save.
Tip #2: Have Portions Of Your Paychecks Automated Into Your Savings
If you’re receiving a paycheck on a weekly or bi-weekly basis, it’s a great idea to have a portion of that check go straight to your savings account. If you’re not comfortable doing that for every check you receive, you could also see if it’s possible to have auto-transfers from checking-to-savings at least once or twice a month. If you’re not sure how to go about this, there are so many apps out there today that can help you with auto savings. Using an app can also help you to see where you’re spending your money, and what you could possibly cut back on.
Tip #3: Make Sure You Use Your Credit Cards Wisely
If you have a credit card(s), make sure they’re working for you and not against you. When looking to purchase a home, a credit card can help you or hinder you depending on how you use it. If you have a credit card, make sure you’re not using it too much, and also be diligent with paying them on time. If you’re using your card wisely, this will only help your cause when purchasing a home. A credit card can help you build up your credit score and could maybe help you to get pre-approved for a mortgage for more than you thought you could.
Tip #4: Look For A Side Gig
Understandably, many of us are busy with full-time jobs, but if you’re looking to save over a certain period of time to purchase a home, there are many side gigs out there that can be convenient to your schedule. You can start working a side-hustle job that doesn’t have to be every day, and that can be done whenever you have time. You could become an Uber or Lyft driver, you could join a food delivery service, or even list your home on Airbnb. In today’s world there are endless opportunities to earn money on the side.
Tip #5: Use Windfalls To Your Home-Saving Advantage
Throughout the year, you should take notice of the occasional windfall you come across. If you can, try to put any extra income or gift money you receive into your home-savings account. It can be tempting to come across this money and want to spend it, but try to commit to putting the full amount aside. Extra payments you could consider saving could be things like your tax return, a work bonus, a holiday bonus, and birthday/holiday money that’s gifted to you.
Tip #6: Cut Back/Cancel Subscriptions & Services You Don’t Need
A lot of people, and many Gen Zers are currently paying for subscription services like Netflix, Hulu, and/or Amazon Prime. Although the monthly payments don’t seem significantly high, cancelling these subscriptions can only help you to save more in the long run. You might also want to consider how much you’re spending on gym memberships, magazine subscriptions, food services, and more and whether or not you can at least temporarily live without them while trying to save.
Tip #7: Pay Off Your Highest-Interest Debts First
Many Gen Zers are facing student loan payments, and also might be paying off credit cards and other debts. Whatever you do, first and foremost, try to pay off whatever debt has the highest interest. If you do so, you can help to free up more cash, which will allow you to pay down some of your other debts as well. Freeing up the cash can also be used to put towards your savings. Most of time, credit cards have higher interest rates over student loans, but you can always have your mortgage lender compare them for you.
Moral Of The Story…
if you’re a part of the nearly 60% of Gen Zers that want to buy a home in the next five years, know that these tips can certainly help direct you to your goal and dream of doing so. Whether you’re interested in finding out where you stand today, or where you stand within the next five years, make sure to contact one of our loan officers. They can be instrumental in guiding you to homeownership and what your best options are for purchasing a home that’s right for you.