Key points
- I can’t help the high interest rates, but I can take one big step to make buying a home a reality: saving money.
- I pay myself first so I’m not scraping the bottom of every paycheck to set money aside.
- Dreaming about becoming a homeowner is keeping me motivated to save.
Back at the beginning of 2022, I decided that I wanted to buy a house in 2023. Ultimately, I changed my mind about that, based on my finances and watching interest rates rise over the course of the year. We started off 2022 with the average rate for a 30-year fixed mortgage loan sitting at 3.22%, and finished the year with the average rate for that same mortgage coming in at 6.42%, per Freddie Mac.
I’m not the type of person to sit back on my laurels, though. Since I reframed my goal to buying a home in 2024 instead, I decided the best thing to do to prepare would be to spend 2023 saving money.
I set a savings goal of $50,000, knowing this would give me enough for a down payment as well as cash to cover closing costs, moving, and some initial inexpensive home improvements, like paint. (While I’d love to buy a home that’s move-in ready, I have no illusions that my taste in wall colors will match that of the seller.) Now that we’re several months into 2023, it’s a good time to assess my progress.
Watching my savings grow
As of this writing, I’m a little over two-thirds of the way to my goal. I was able to start saving before 2023 began, before I left my salaried job and became a full-time freelancer. This meant that for a few months, I was able to put all my freelance income into my savings account (less taxes, of course). My weekly savings rate has since decreased because I now pay my bills out of my freelance income, too. Thankfully, my costs are pretty low since I’m a renter, I work from home, and I drive a 14-year-old car that’s been paid off for a long time.
I’ve been able to keep adding to my savings by taking the following steps:
- I pay myself first. When I get paid every week, I immediately take money for taxes right off the top of my total, then my next subtraction is money for my house fund. This way, I’m not scraping at the bottom of my paychecks to set that money aside.
- I have a weekly goal. I broke down my total goal of $50,000 into a set amount to save every week, so it’s very easy to track my progress (and how many more weeks I’ll need to put that money aside to reach my goal).
- I sometimes kick in my savings account interest. Since I have my money in a high-yield savings account with an online bank, I earn a nice rate of interest on it. So there have been a few months where I’ve added that interest payment to my house fund, too.
Staying motivated
I haven’t really struggled with motivation to save for a home, as I’m well and truly sick of renting and yearn to buy a place of my own. I’m sure some of that desire is related to the lousy experience I had with homeownership the first time around. But ultimately, I’m tired of constantly moving and feeling as if I’ll never have a real home.
If you’re trying to save a large amount of money for a set purpose, the best way to stay motivated is to let yourself think about the future you want. Every time I add money to my house fund, I contemplate how wonderful it will be to furnish and decorate a house and know that I won’t be pulling everything off the walls and shoving it into boxes in a year or two’s time because I have to move yet again.
What’s next?
I’m feeling pretty good about my progress in saving for a home, but life is full of unexpected complications. If I end up needing to use some of my house money early for a surprise bill, I will be disappointed. But I’d still prefer that over going into debt for an unplanned expense, like I used to before I had a solid amount of savings. Between now and next spring, when I hope to buy, I’m going to keep dreaming about my future home — and socking money away every week to make it reality.
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