It’s very difficult to save money in a city like Mumbai, considering the costs of living. But saving is the only way in buying a house. You can’t get a 100 per cent home loan of the property cost. Other than the 20 per cent down payment, you will need to shell out cash at every step. So, if you are not in the habit of saving, get into it right away. We are giving below some tips how to save:
Before you start saving for your down payment, make a list of all your expenses and identify your needs and desires. You have to meet your needs but desires can be prioritized. This will help you save money at every step. Also, create a savings target for every month by a few hundreds.
If you have the habit of using your credit card after every purchase stop it. When you pay by cash you get a better idea of how much you are spending on every item or service. This can help you curtail your expenses and stash away from money for your home.
You must be enjoying movies at a multiplex every weekend or might be dining out at plush restaurants. Well, unless you are super rich, you have to cut down on these expenses. Try renting out DVDs at home, hosting a pot party or jogging rather than paying a gym membership to save for your home deposit.
If you are staying on rent and plan to shift to your new home in one or two years, curtail your rent expenditure. Now, if you’re single then you can take up PG accommodation or move in with friends as it will help save considerably. In case you’re married, it might be a good idea to live with your parents. You might have to make some minor lifestyle adjustments, but the money saved will help you immensely.
Multiple your investments:
In order to buy a house, you need to make your money work hard. Invest in accounts or funds that guarantee a higher rate of interest. You can also take a few risks if you are in your early twenties. Also avoid breaking your investments or spending money from dividends on jewelry automobiles or holidays. This will leave you with more cash.
Let us tell you that retail therapy and seriously saving for a house don’t go hand in hand. And it’s disastrous if you are a shopping freak. Resist the urge to check out the latest store or shop at every possible discount sign you see. Stay away from malls or shopping complexes if you can’t control yourself. You will save at least a couple of thousands for your home.
You will need a lot of money for your down payment. So, if you have the knowledge / skill to earn from another source other than your regular job, go ahead with it. Some of you could give tuitions while others could conduct workshops. Every bit of money will count. This also means that you have to sacrifice a bit of your free time to garner more cash.
Living in a city like Mumbai can be very expensive. So, you have to learn to save at every step like cutting down on water, power, and call phone bills. Avoid sending those unnecessary forwards to friends. While traveling take buses instead of cabs or form a car pool with colleagues to save on petrol. Such small savings will go a long way.
If you have a wedding or social event at your place make sure that you spend in control. Do it in smaller scale, cutting away the extra frills and keeping the guest line list to a minimum. If your parents or relatives want to spend request them to give the amount in cash so that you can invest it in the house.
Make sure you have a medical policy in place from an early age. This will help you cover major illness or accident to self and other family members. Proper insurance will help you save money on emergencies or medical expenses that can burn a big hole into your savings. The same applies for your automobiles.