How to Afford a Home in Your 20s
For many people of the millennial generation, after finishing university and securing a job, purchasing a home is the next big thing. And while it may sound as simple as following the steps along the path, for many of that same generation, it is proving anything but easy. In fact, often 20- somethings assume they won’t be able to afford a home in their 20s and will need several more steps in between. But all hope isn’t lost. You might just have to hack the system.
Start With a Plan
The best way to get to the end goal is to know how you are going to get there. While your 20s are meant to be a time of fun, adventure, and trying new things, it doesn’t have to come at the expense of your future savings or financial stability. Taking responsibility for your finances early on with a plan in place to control major purchases and pay down debt, shows a high level of maturity and financial efficacy. While you can start this process on your own, reaching out to a financial advisor will also prove incredibly beneficial.
Practice Sacrificing
Start with the reality that for the year or two leading up to getting your home, you may just have to say no. Cutting costs and making a few sacrifices over a long period of time will pay off big time on the other end. For example, if you usually spend $15 on getting a takeout lunch twice a week for work, you can save over $1,500 dollars over the course of a year if you instead bring your lunch from home. Likewise, to save you can cut back on takeaway coffees, going out to dinner and weekend drinks. Take it a step further by looking at your monthly spending on non-essential items. Things such as extra phone data, online movie subscriptions, and magazine subscriptions all add up. Reducing or eliminating these can be a great way to start to cut back on costs.
Find Your Tribe
Like anything big, it’s harder if you do it alone. And while you may have to come up with the savings alone – or with your partner – that doesn’t mean you have to go through the struggle, stress, or uncertainty alone. Put together a tribe of people who will help hold you accountable to your savings goals and remind you of the end result when you are tempted to splurge on a weekend shopping spree. In addition, reach out to professionals. Having a financial advisor is very helpful to keep you on track. Not to mention, an advisor can help you to know how to best structure your finances to maximize your chances of getting a loan. When it starts to get close to the time you would like to purchase a home, be sure you get pre-approval for your mortgage, as this will make the buying process go much more smoothly.
Whether you have saved your money or you will soon have enough saved, Hallmark Realty wants to work with you to help you find that well deserved home. Reach out to us to find out how we can help and to get you started on your home search.
