There is one thing that frugal spenders have in common: not wanting to spend money on frivolous things. If you’re a frugal spender, you probably keep an eye on your spending, have a savings account open, and avoid debt at all costs. To most people, purchasing a home is an intimidating process, especially since it involves taking on a lot of financial responsibility. However, if you’re truly money conscious, you’re likely aware that purchasing a home is a more fiscally responsible move than constantly renting.
Want to know how to go from being the frugal spender to becoming a confident homeowner? Here’s how.
Save for a good downpayment
If you’re frugal, you’re probably used to saving money in any way you can. However, before now, you might not have been saving towards a specific goal. Because houses cost so much money, even the best of savers would struggle to be able to buy a house without going into debt. You can alleviate how much debt you go into by saving up for a high down payment. The more money you put down on a mortgage, the less interest you’ll end up paying down the road because you’ll be able to pay the house off more quickly.
Save up for a house you want to live in
When it comes to purchasing a home, choosing the lowest priced listing doesn’t always mean you’re going to fare better in the long run. First off, lower prices houses might require much more maintenance. Second off, if you’re going to own a house, you should own one that you love. Saving up for your dream home doesn’t mean you need to purchase a luxury beachside dwelling. It can mean saving towards a home that’s going to benefit you in the short term and the long term.
Choose an affordable house
When shopping for a house, make sure you do your research beforehand to determine what you can and can’t afford. Factor in things like your monthly mortgage payment, homeowner’s insurance, taxes, maintenance, utilities, and emergencies. Take a look at your monthly earnings and make a choice on a house that you’ll be able to comfortably afford without having to dip into savings frequently. How much home you can afford will depend on not only how much you make each month, but also how much money already goes towards bills. Do you have car loans or student loans? Do you have a lot saved up? All of these factors will help you figure out what you can and can’t afford. Remember, this is a financial commitment that you’re going to have to pay off for several years to come.
At the end of the day, purchasing a home is a huge financial decision to make. However, if you do it right, it’s also a very responsible financial decision due to how valuable real estate is in the country. Additionally, you’ll be paying money towards ownership rather than towards monthly rentals. Want more advice on how to live frugally and become financially free? Stop back to From Frugal to Free for more blog posts.