I’m a very goal-oriented person, and this is a quality that has persisted in me through all the circumstances and many (MANY) changes I’ve seen over my nearly four decades of life. As I write this, I’m feeling extremely proud of myself for meeting the biggest savings goal I’ve ever set. Last year, I decided that I wanted to save $50,000 to buy a home in 2024, and I have officially hit the target.
Based on home prices in my area, $50,000 will give me a 10% down payment and pay for closing costs (and expenses like a home inspection). Plus, it’ll cover the cost of movers — I’m moving out of a second-floor apartment, and I will pay professionals to haul furniture down the stairs.
Finally, my savings should leave me with an emergency fund after I’ve paid other expenses. I’ve heard too many home-buying horror stories about people needing to cough up money for a big repair not long after purchasing a house, and I’m coming from years of renting (and therefore minimal maintenance costs). Since I’m a firm believer in Murphy’s Law (if something can go wrong, it will) and I’ll be buying an older house, I want to have cash savings to cover these costs.
So now that I’ve hit my target, I’m done saving, right? Nope. In fact, I’m hoping to stick another $10,000 in the bank before it’s time to get the ball rolling on buying a home. Here’s why.
Owning a home is expensive
I expect my monthly housing costs to roughly double when I go from renter to homeowner. Right now, those costs amount to rent and a renters insurance policy. But once I sign my name on a mortgage loan, I’ll be responsible for monthly mortgage and interest payments. Plus, I get to take on homeowners insurance and property taxes.
And there are also the many other costs of homeownership that don’t necessarily come into play every month. These include maintenance as well as any big repairs that crop up. Having an extra $10,000 saved would help me feel better about taking on this responsibility.
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I quit my last W-2 job at the start of the year and dove headfirst into freelance life. The flexibility has been wonderful for my mental health, and my productivity has put my finances into the best shape ever. That said, buying a home as a self-employed person could prove to be more difficult than if I were a salaried employee.
If I can amass more money on top of my $50,000, I’ll have more cash reserves to show a mortgage lender, and ideally, that would provide reassurance that I’m not a risky borrower. Mortgage rates are already higher than I want to pay (the average for a 30-year fixed mortgage is about 8%, according to Freddie Mac). So more money in reserve coupled with my excellent credit score may help me overcome any potential stigma from being a freelancer.
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I’ve written before about my progress on my goal, but it bears repeating here: If I could do this, so can you. Here’s how I did it.
I set smaller goals
A huge savings goal can be intimidating, so I found it easier to approach it week by week. I ran my numbers and knew that I could afford to save a certain amount every week. And with very few exceptions, I hit those goals.
I paid myself first
When I get paid every week, I take Uncle Sam’s cut out first (as a freelancer, I have to pay my own taxes in quarterly installments). Then I immediately take out the money I’m saving for future goals, like buying a house and vacation expenses.
If you wait until all your bills are paid and your fun money is spent, you might struggle to scrape up the money to save. Instead of putting it off, take it off the top.
I daydreamed about buying a home
Imagining myself as a homeowner and thinking about everything I’ll be able to do (like installing cat shelves for my furry roommates and creating a real guest room for houseguests) definitely kept me on track. If you’re saving for a goal, take some time to imagine how wonderful it’ll be to meet it. You might just find even more motivation to save.
I intend to keep taking the above steps to stick an additional $10,000 into my high-yield savings account before I’m ready to start the buying process next year, and they can help you meet any savings goal you’ve got, too. Take it from me — your dreams are worthwhile, and you can make them a reality if you make the right moves to save money for them.
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