7 Essential Tips on How to Save Money and Buy a House
Know your current financial condition well, create a reserve and learn about the various forms of payment. Check out several tips to save money and buy the house of your dreams!
The classic dream of home ownership is a common feature that connects millions of Pakistanis. After all, who wouldn’t want to have their own little corner and ensure more safety and comfort for their family? But the need to save money over a long period of time is an obstacle for many people.
In this blog post, we have gathered some essential tips for you who are starting to want to turn your dream of a new home into a reality. There are seven items you should reflect on to get your life in order and get closer to that great goal. Check out!
1. Analyze your Current Financial Condition
For starters, paper and pencil in hand – or some app, if you’re the type who likes everything digital. Write down all your sources of income and your monthly expenses. And when I say all, I mean all of them – that candy you bought on impulse when you were going through the supermarket checkout also has to enter the account.
After all, you need to have a comprehensive view of where your money is going. And you can be sure that you will be surprised at the money that goes away on superfluous things. It’s like that with everyone, whether it’s the candy in the market, that streaming that you pay for and don’t even watch, the book you got in the promotion and didn’t read, etc.
These are little things that add up to become a significant expense over the course of a month or an entire year. If you put it on the tip of the pencil, you will see that the small waste of everyday life may be preventing you from being able to save money for a greater goal.
2. Change What Is Not Working
Many things just happen out of habit. You and I know very well that certain day-to-day routines are not very healthy, either for the body or for the pocket. But you need that little push to take action and change, right?
The list of your income and expenses can be a motivating factor in this regard. Watching your rich money slip through your fingers with things you should not even have bought hurts. But it can be worse: imagine spending money on something you know you should be doing but don’t (the gym you quit after two weeks).
This is just to remind you that you do not have to fall into paranoia to save money. It is not about cutting everything but about allocating your resources where it makes sense. If the gym makes sense to you, remember the money that was invested there and make it count.
On the other hand, if you have an expense that does not make sense, cut, reduce, or replace it. Maybe your cellular plan has a higher internet limit than necessary. Is it possible to exchange it for a cheaper one?
What about all those streams you pay for every month and cannot even manage to watch all? You can take turns there and greatly reduce the monthly cost with them. So, take it easy to make better decisions.
3. Try to Save 30% of your Monthly Income
Buying a property is a big goal and one that requires a lot of effort. Ideally, you can manage your finances well enough to be able to save 30% of your monthly income. But, as we said, no paranoia. You do not have to live on bread and water because of it or feel guilty every time you swipe your debit card.
In fact, saving almost a third of your monthly income is quite a challenge. This is a reference percentage, but you can modify it to fit your current conditions. Just be aware that the greater your ability to save money, the faster the goal will be achieved.
And for that, you need discipline. First, do not wait until the end of the month to see if you have any money left to save. The right thing is to separate the planned amount immediately, as soon as the salary enters the account. This makes it easier to maintain control and you will have a good feeling seeing your spare change reserved for the future.
4. Consider Unexpected Expenses
Here is another reason why the mission to save money to buy your home should not be turned into psychological torture: the unforeseen can always happen. The TV that burned, the car tire that punctured, and so many other unexpected things can delay your plans a little.
The central idea behind financial planning is to be prepared for this type of situation. Of course, in an ideal world, it would be nice not to have to mess with your savings like that all of a sudden. But to have a margin of safety, economists often recommend that we have enough emergency reserve to live at least six months if all goes wrong.
5. Learn about the Real Estate Market
From now on, the tips are more geared towards preparing for the purchase of your new home. Since the process of saving money is long, it gives you time to understand how the real estate market works and everything that involves a transaction of this type, such as documentation and financial issues.
And at this point, the internet helps a lot. Today any questions you may have can be answered with a few clicks, a privilege that our parents and grandparents did not have. Look for websites, blogs, podcasts, and YouTube channels that cover topics that interest you and absorb that knowledge.
Here in this blog, for example, we have content that addresses various aspects of buying a property.
6. Think about the Ideal Property Profile
Start thinking about the type of property that would meet your needs. You can do this by doing thorough research on the internet.
To choose your ideal property, in addition to thinking about the size and number of rooms, it is necessary to consider the following aspects:
⦁ Infrastructure, transit, and transport
⦁ Proximity to your place of work
⦁ Availability of educational institutions (especially if you have young children)
⦁ Commercial and service establishments
⦁ Leisure areas
7. Learn about Payment Methods
Another point that requires a lot of attention is the payment method. It is good to understand the available options well to avoid confusion when closing the contract.
Financing is a type of financial transaction in which the value of a product or service is divided into a certain amount of installments. It is an option for those who cannot pay the price in cash, especially for more expensive goods, such as cars and real estate.
The operation is carried out through financial institutions that, in practice, lend money to the customer to purchase the good and charge the return with a certain percentage of interest. That is, if you finance an asset through a bank, the bank pays the amount to the seller and expects you to return the money over time.
The consortium is a type of negotiation managed by companies called administrators. The Central Bank supervises all procedures to ensure the safety of all involved.
When we hire a consortium to buy a property, we become part of a group with several other people who have the same objective. Each of them must pay their installments on time so that the amounts are accumulated in a savings account. The idea is that, over time, all group participants receive the amount necessary for the purchase.
The administrator defines the order of distribution of these amounts by lottery. As a member of the group, you can increase your chances of being considered by offering a bid, that is, an anticipation of the consortium’s installments.
Real Estate Exchange
If you already have a property, you can resort to a barter negotiation. It is an agreement in which the parties exchange one good for the other. In the case of a real estate exchange, it can be an exchange of an apartment for a house, for example. The important thing is that those involved reach an agreement in which both feel benefited.
It is worth noting that, in this type of exchange, the financial values of the properties do not need to be exactly the same because the concept of value is quite relative. A person with a PKR 200,000 apartment in the city can accept to exchange it for a PKR 150,000 house in the countryside because, for them, the fact of moving to a quieter area makes up for the financial difference.
Another point is that the exchange of real estate may involve other assets. If one property is more expensive than the other, one of the parties may want to include a car in the negotiation to make the exchange more balanced.
As you can see, saving money and buying a home takes good preparation. Whenever you have any questions, visit Sky Marketing and enjoy our content. By the way, have you ever stopped to think if it’s worth buying or renting a property?
- 1 7 Essential Tips on How to Save Money and Buy a House
- 2 5. Learn about the Real Estate Market