You want to buy a home, but first you need to get your finances squared away. You’ll need money for a down payment, for moving and for other costs. How can you get more money in just a few months? Here are three ways that work together as nicely as compound interest.
1. Slow down your spending.
Like counting calories on a diet, tracking your spending can be an eye-opener. You’ll identify “spending leaks” that can be easily plugged, like eating out less often or only buying items at the grocery store that aren’t on your shopping list. You’ll see that small changes make a big difference to your bottom line.
2. Save more.
Like spending less, setting money aside is important, too. Look at your monthly expenses and determine how much you can save, then have that money debited from your checking account and put into a savings account, a short-term CD or other vehicle with every paycheck. This account should be considered separate from your retirement savings.
3. Pay off revolving debts.
If you can’t pay cash (or debit) for something, don’t buy it. Focus on reducing credit card balances. Pay off the card with the highest interest rate first, make payments on time, and pay much more than the minimum payment. As you eliminate each debt, double down on the remaining cards.
Keep your goal to buy a home top of mind always, and you’ll be pleasantly surprised at how quickly you can make your dream happen.