Buying your first home was exciting and nerve-wracking, and now you feel you’re ready to buy your second home. There are plenty of reasons why people want a second home, but we’re not going to delve into that. We’re going to talk more about how to save up money for a second home.
Buying a second home or property can either be easier or harder than buying a first home. Because everyone’s situation is different, you may have the knowledge of buying a home, but you may also have different priorities or circumstances. The numbers are going to be different as well for a down payment, closing costs, and maintenance and repairs.
Take a look at your savings and checking accounts
It is important to see your financial situation before hunting for a second home. Your savings goals are also going to be different depending on your current situation. And it’s not the amount of money you have currently, but also the amount of money you pay each month.
People don’t realize that they’re wasting their money away by paying the fees for their checking accounts. If you’re in the same position, you can ask your bank if there are ways to not pay the monthly fees by switching to a free account or using other kinds of accounts.
As for your savings account, see if you’re earning a decent interest rate. Most big banks offer peanuts on the interest rate, which amounts to nothing in a year. Typically, you’re after a 1% of interest rate on your savings. You can do this by opening a high-yield savings account at a bank. Also, feel free to compare savings account interest rates on every major bank in your area.
Reduce unnecessary expenses
A lot of people don’t even realize that they’re overspending on things. It can be monthly subscriptions that you don’t need, luxury items you don’t even want, or simply impulse shopping. The thrill and happiness you get from shopping wouldn’t even compare with the joy you get from finally buying your second house. Therefore, some sacrifices must be made today.
Take a look at your monthly expenses, if you’re familiar with budgeting, this step shouldn’t be too difficult at all. See if there are some expenses you can cut or don’t even realize exist. Reduce as many expenses as you can to reach your savings goal quicker. As always, any amount of money you save should go into your savings account or at the very least, your emergency fund.
Monitor the housing market for your second home
The housing market is ever-changing, and sometimes it can move really fast. If you think you already have enough money for a down payment, you need to start monitoring the housing, or you can do that now no matter where you are at your savings goal. By learning how the housing market moves, you can determine when the best time is to start looking for a second home.
Sometimes, the housing market will get so bad that no one in their right mind should buy a house, first or second. It’s the same as shopping when the price is right or when there is a discount. Why spend more when you can spend less?
Sales and promotions
In the same vein as the above topic, you can cut back on your expenses by taking advantage of sales and promotions. Stores change their prices almost all the time, and most of them even give you a lot of promotions such as cashback or partial refund.
Nowadays, there are apps you can use to check out sales and promotions. With just a few clicks, you can see if there are sales you can use to certain stores that you like. If you put enough effort into this, you can save a ton of money on your monthly expenses. In the long run, this will help you reach your savings goal quicker.
Conclusion
Saving up for your second home is more relaxing than saving up for your first home. But, it can be a daunting task for people who are not used to cut back some expenses and saving money. Nevertheless, if you keep working at it, you will reach your savings goal eventually.
