A 2018 survey by the National Association of Home Builders found that 76% of potential homebuyers estimated they could afford fewer than half of the homes for sale in their markets. With statistics like these, it’s no wonder many Americans think renting is their future.
However, with a little bit of hard work and dedication, that pipe dream could turn into reality. All it requires is dedication and some financial skill.
1. Take an inventory of your expenses. Even if you live paycheck to paycheck, chances are good there are at least one or two items you can do without. For example, do you pay a monthly subscription to Netflix, Hulu or Spotify? While monthly payments of $10 or $15 might not seem like that big of a deal on their own, they can quickly add up. Consider any subscription or luxury service you can do without. Canceling now doesn’t mean you have to cancel forever, it merely frees up some extra cash you can put toward buying a home. You can apply this mindset to your eating habits as well. For example, instead of eating out for lunch or getting a coffee every day, you can pack your lunch or make your coffee at home. Little practices like these quickly add up.
2. Establish a budget. Budgets are lifesavers because they help you determine how much money you can spend every week. There are necessary expenses such as rent, food, and utilities, and then there are miscellaneous expenses like entertainment and vacation. Establishing a budget provides a guideline to ensure you don’t spend above your means. If it’s easier, go to the ATM on Sunday night and take out all of the cash you’ll need for the week. With cash in hand, you’ll always know how much you have left to spend.
3. Open a high-yield savings account. A high-yield savings account is like a traditional savings account, but it yields higher interest. This means you get a higher return on your money and better results over time. There are a wide variety of high-yield savings accounts available. It’s recommended you meet with your personal banker to determine what type of high-interest savings account will best meet your needs.
4. Start a side hustle. The gig economy is transforming the way Americans make money. Thanks to platforms like Uber, Lyft, and PostMates, making a couple hundred dollars a week isn’t just possible, it’s easy. Hours are flexible and you can work as little or as much as you want. Give it a try, you might really like what you discover!
5. Don’t let anything get in the way of your goal. Many Americans think buying a home isn’t possible. Forget the naysayers! No matter your background or budget, you can achieve your dream. USDA loans, FHA loans, 203(k) loans, and veterans loans all provide access via unconventional means.