How to Effortlessly Save for a New Humble, Texas Home

...even while you’re still renting.

If you’re renting your current home and have your eye on making a home purchase in the near or distant future you might be worried that it can’t be done. The good news is that there are some effortless ways to grow your home savings with a little bit of set up and a touch of discipline.

1) Know your goal.

The best place to start is knowing how much cash you’ll need and by when. Typically, you should aim to save 5-20 percent of your planned North East Houston home purchase price to qualify for a traditional 30-year mortgage. This amount might seem overwhelming at first but, when you break it down into annual, monthly, then weekly goals, it'll start to feel much more manageable.

Defining your timeframe goals will help to better understand what would be required of your saving habits on a regular basis. Once you've figured out how much you'd need to save each week, you may wish to re-evaluate your time goals to reflect a more relaxed saving schedule if the first iteration feels too aggressive.

2) Pay Down Credit Card Debt.

If you’re carrying any consumer credit card debt, try to reduce that first before focusing on saving. When you attack your high-interest credit debt, you're moving towards a higher credit score which will improve your chances of getting a mortgage-- debt is a considerable factor lenders use to qualify you for a loan. Your higher credit score can even result in better mortgage interest rates!
Note: This may result in a smaller difference between mortgage payments after a smaller down payment than what you may initially be planning for, so plan carefully if you're hoping to increase your budget!

Once your debt is paid off, you’ll not only have a lot more money available in your budget to set aside for a down payment, but you're ultimately decreasing the cost of paying off your debt in the long-run.

3) Use a budgeting app.

Many free budgeting apps rake through your bank accounts and online credit card statements to track your spending for you. Once you have a good understanding of how much you’re spending, assess what could be cut back and set a maximum budget for each category. Then, plug in your target monthly savings amount for your newest budget item – a new Humble, Texas home!

4) Lower your biggest living expense.

Saving for a down payment on a home is going to be tricky if you’re living in a high rent district. Consider finding a smaller rental in Humble, Texas, living with friends or family, or taking in a roommate to lower your biggest monthly payment — your rent.

5) Automate.

The easiest way to save money is to make it automatic — take savings right out of your paycheck so you never even see it before it goes into your savings account. If you can’t see it, you can’t spend it! Alternatively, you can set up an automatic deduction to transfer a weekly amount from your bank account into a savings account. Your savings isn’t the only thing you should automate – to save money on potential late fees, automate all your bill payments.

6) Stay positive.

Frame your down payment goal as an exciting thing to look forward to rather than a chore. This helps to avoid stress as you approach dealing with financing your new home; you'll also find that saving money will start to feel less like a fixation on money you don't have and more on the wonderful home you will have in the future! Don't forget to budget for a small treat every now and then to reward yourself and keep things feeling upbeat. You may even find that you're so excited by saving that you use some of your flexible spending funds to save extra money for the month!

7) Make more money.

If the majority of your income is already tied up in expenditures that can't be cut from your budget, consider taking on some side jobs. Look around your home for things you’re no longer using and arrange to sell them. You can also use one of your personal strengths, like writing or painting, to start a viable side hustle and get paid for your skills; all of this extra money can go directly to your home savings goal.

8) Make accessing your savings inconvenient.

It’s easy to see something you want and find a way to rationalize dipping into your savings. Take the willpower out of the decision by making your savings difficult to access. Put the savings in an account that doesn’t have an ATM card linked to it, or use a bank that requires you to make withdrawals in person.

Keep in mind these tips as you begin saving to buy your Humble, Texas dream home. Also remember that you can always seek out help from your local real estate pro to give you an overview of the North East Houston real estate market and to find a lender or financial coach to help you get started on the right foot.