Savings Strategies Every First-Time Homebuyer Needs To Know

Savings First time home buyers

If homeownership is on your goal sheet for your future, you’re probably working on your savings. A big priority is making sure you’ve got a plan in place for things like your closing costs, down payment, and more. Here are a few strategies that can help speed up that process.

Budget and Track Your Expenses

To start, create a detailed budget that tracks the money you’ve got coming in and the money going out. This will give you a better look at your finances as a whole.

Steps to Create a Budget

1.  List Your Income: Write down all sources of your income. This includes your job, side gigs, and any other sources of money.

2.  Track Your Expenses: Keep track of everything you spend money on. Divide your expenses into categories like rent, groceries, utilities, and entertainment.

3.  Compare Income and Expenses: See if you’re spending more than you earn or if you have extra money left over.

By having a clear picture of your finances, you can start to see where you can save more money for your new home in Naperville or the Chicago suburbs.

Cut Down on Unnecessary Spending

Now that you have your budget sheet done and you know how you’re spending your money, look for any line items that aren’t absolutely essential. If you cut down on those, you can re-allocate that cash toward buying a home. Even the little things can add up. As the National Association of Realtors (NAR) says:

“The majority of first-time buyers did make financial sacrifices to purchase a home. For those who did, the most common sacrifices buyers reported were cutting spending on luxury goods, entertainment, and clothes.”

Tips for Reducing Expenses

1. Eat Out Less: Cooking at home is usually cheaper than dining out.

2. Cancel Unused Subscriptions: Review all your subscriptions and cancel those you don’t use.

3. Buy Generic Brands: Opt for generic brands instead of name brands for groceries and other items.

These small changes can make a big difference over time, helping you save for your home in **Naperville** or nearby areas.

Automate Your Savings

Once you know how much you want to set aside for your homebuying budget, look for ways to make it easy. If you have to transfer money manually, you may forget to do it. But getting some automatic transfers set up helps drive consistency and removes the temptation to spend it elsewhere. explains:

“If you’re struggling to put enough money away because of the constant temptations to blow your paycheck, consider automating the process. Ask your employer if you can have your paycheck deposited into multiple accounts—if so, instruct it to send a certain percentage of your salary directly into your savings account. Or go through your bank . . .”

How to Automate Savings

1. Set Up Direct Deposit:  Arrange with your employer to deposit a portion of your paycheck directly into your savings account.

2. Use Banking Tools:  Many banks offer tools to set up automatic transfers from your checking to your savings account.

By automating your savings, you ensure that you’re consistently putting money aside for your future home in the Chicago suburbs.

Lean into Any Side Hustles You Have

Do you have a gig you do (or have done before) to net some extra cash? Taking on part-time work, freelance jobs, or picking up a side hustle can help give your savings a boost.

Ideas for Side Hustles

1. Freelancing:  Offer your skills online, such as writing, graphic design, or programming.

2. Part-Time Jobs:  Consider taking a part-time job in the evenings or on weekends.

3. Sell Unused Items:  Sell items you no longer need on platforms like eBay or Facebook Marketplace.

Extra income from side hustles can quickly add up, bringing you closer to your goal of owning a home in Naperville or the surrounding areas.

Put Any Unexpected Cash To Good Use

If you get any sudden windfalls, like a tax refund, bonus, inheritance, or cash gift from family, put it toward your house fund.

Ways to Use Unexpected Cash

1. Direct Deposit:  Have any bonuses or refunds directly deposited into your savings account.

2. Gift Funds:  If you receive cash gifts, immediately transfer them to your savings.

Using unexpected funds wisely can significantly boost your savings, helping you reach your homebuying goals faster.

Stay Focused and Motivated

Saving for a home can take time, so it’s important to stay focused and motivated. Here are a few tips to keep you on track:

Set Clear Goals

1. Define Your Savings Goal:  Know exactly how much you need for your down payment and closing costs.

2. Break It Down:  Divide your goal into smaller, manageable milestones.

Celebrate Small Wins

1. Reward Yourself:  Celebrate when you reach a savings milestone, but keep the reward simple and budget-friendly.

2. Stay Positive:  Remind yourself why you’re saving and keep the end goal in mind.

Bottom Line

Budgeting shows your money who’s in charge (that’s you).  It gives you the power to tell your money where to go instead of having to wonder where it went. It’s how you make any money goals happen—like saving for a down payment. By using these strategies and focusing on your savings over time, you can make sure you’re well on the path to having what you need to buy your first home.

If you need more strategies for getting ready to buy, let’s connect. With careful planning and the right advice, you can achieve your dream of homeownership in Naperville or the Chicago suburbs.

Call Teresa Ryan today, at 630-276-7575 for expert advice and guidance when you buy your first home in the Chicago suburbs!

Get a copy of our Home Buyer Guide written by Teresa Ryan for Chicagoland home buyers, visit: FREE Home Buyer's Guide

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