Do you desire to own a home? Who doesn't, then? Even though you might not be seeking to buy a home right now, you will soon. The majority of individuals dream of owning a home, but only a select few are fortunate enough to find the residence of their dreams. If you are concerned about having enough money saved for a down payment, you are not alone. We hope that our money-saving advice will enable you to amass the necessary funds for the down payment for the apartment you have had your eye on.
In rare situations, your bank will finance 90% of the cost of the house or apartment. The remaining amount is a down payment that you must fund yourself. For a family in the middle class, this is a sizeable sum. For instance, if your two-bedroom kitchen costs Rs. 30 lakhs, your bank will finance up to 24 lakhs of that amount, leaving you to pay the remaining 6 lakhs out of pocket.
Purchasing a home is a difficult choice, especially if it's your first. To get the best residences at the best prices, you will need professional assistance. You'll feel more confident and at ease while picking a home if you have enough money saved up before going house hunting. Here, we're going to provide you some money-saving advice that will empower you to manage your finances and set aside funds for that ominous-looking down payment.
1. Keep tabs on your expenditures.
Although tracking your spending is one of the most tedious and overused money-saving strategies, it truly does help. There are numerous websites and apps that can help you keep track of your spending and keep a running tally of how much you spend on various goods or categories.
Many people's eyes are opened by this procedure. Sometimes, unless an app tells us, we fail to notice the obvious! Reduce your luxury spending and put more money into savings. The first step in figuring out how to retain more of your money in the bank is to identify where it goes.
2. Don't be frightened to invest in mutual funds; do your research.
You can learn why mutual funds are one of the most widely used investment strategies today by conducting a quick internet search on the power of compounding or the power of compound interest. The number of people participating in mutual funds has suddenly increased in India in recent years. Even though there are a lot of factors to take into account before investing in mutual funds, we advise starting a monthly SIP in an equity fund that meets your risk tolerance.
Equity funds are typically the finest because they provide you with high rates of return. These investments are riskier since market changes in equity funds can occur often, but over time, mutual funds typically provide better returns than bank FD rates.
Visit valueresearchonline.com to learn more about Mutual Funds. Ultimately, it's up to you, but from personal experience, we can say that mutual funds provide respectable returns on investment. Numerous SIP calculators are available to assist you determine the precise amount of savings you'll need to make each month in order to save up your down payment in a predetermined amount of time. A mutual fund SIP calculator, for instance, would show you how much money you need to start saving for your 20% down payment if you expect to purchase a home in 2020.
This strategy of investing, which aids in money growth, is different from the conventional advice for saving money.
3. Establish a monthly budget and follow it.
It will be challenging to stick to a monthly spending plan, especially if you are accustomed to living a lavish lifestyle. It can be difficult and not always pleasurable to stick to a strict budget. Keep in mind that saving money is earning money. Allow yourself a treat or two every now and again, but treat them as an exception, and ALWAYS make up for the cost of this exception in other ways. Making a small sacrifice today, like tightening your belt, will be soon forgotten after you receive the keys to your new house.
4. Start your savings early.
Do you know the proverb "well began is half done"? The lack of early financial literacy instruction is one of the biggest flaws in our educational system. We are not given instructions on why and how to save. Financial long- and short-term goals are unknown to us.
Even though our mothers constantly nag us to save money, the bulk of us are financially illiterate. Start early and set aside at least 15 to 20% of your monthly earnings as savings. Start with your first employment when it has less obligations. Some people try to save as much as possible—up to 50% of their savings. This is the most effective money-saving advice out of all the ones available.
If you start saving early, you'll have enough money for a down payment on a home by the time you're 30.
5. Find strategies to increase your revenue.
Most of us middle-class paid individuals have only one source of income (i.e. monthly salary). In these situations, there are at most two income sources because both the husband and wife are employed. The number of ways that money can leave the country is always greater than the number of ways that it can enter. Imagine an upside-down funnel representing your income and expenses. Every successful individual is aware that in order to conserve money, extra revenue streams must be developed.
You can generate a secondary source of income in a variety of ways. Start a blog, a YouTube channel, or just engage in affiliate marketing. If you do your research, you may open an internet store and make big money. There are many internet videos available that can teach you about online businesses.
None of these endeavors require a substantial initial expenditure. A laptop and some free time are all you require. There is a TedX video on YouTube that claims you can acquire a skill to a reasonable level in just 20 hours.
There are two aspects to your budget: your income and your expenses. The best outcomes will come from making improvements on both sides.
For the purpose of a down payment, open a savings account and treat the money as untouchable. Don't even consider spending any of that money until you are prepared to buy a home, unless there is a serious emergency. If you open a separate account just for the down payment, it will be simpler to maintain a restricted down payment fund.
Think of this bank account as a dark space where nothing comes out but light.