Ideally, you will want a job in order to start saving a good amount each week, so if you don’t have a job it would be best to start hunting for one! Even a part time job will be good - especially if you go to school and cannot work full time.
If you still live at home and don’t need to pay for anything, you still may want to spend a little bit of money to reward yourself or go out with friends. By saving at least 10% each week (or however frequently you get paid), you’re putting away a small amount that will add up in the long run. If you are able to put away more, that is brilliant! Do that - the more you’re able to save each time you’re paid, the faster your savings account will grow. Remember to reward yourself for your good money habits - it might seem a little backwards at first, but it’s good to not be so hard on yourself that you cannot enjoy any of the money you’re earning until you reach your goal. If you can’t always save the same amount each time, don’t worry - just do your best!
You might find that you’re spending an extra $20 per week by buying lunch every other day, for example. Saving doesn’t mean you can’t have any fun, but of course, if you can minimize your outgoing costs, then it will impact the amount you can save. Every dollar counts - it all adds up.
Keep these figures in mind when deciding what you will save because while it might not seem like much, it can be quite a lot to save, especially if you aren’t earning much and/or have outgoing costs. For example, you may decide that the highest you’d pay for a house is $200,000. A deposit of ten percent - the bare minimum - would be $20,000. A deposit of twenty percent would be $40,000. Now that you know the highest you’d be willing to pay, you can set a savings goal of between $20,000 and $40,000 and go from there. This way, when you start to look at houses, you’ll know you can afford that much at most, or something cheaper if it were to come along. Getting the downpayment out of the way is only part of the process. It’s important to be realistic and make sure you’ll be able to pay down your mortgage.
Therefore, if you can avoid getting into unnecessary debt then do so. If you seem financially stable, then banks will be more likely to lend you their money. Another thing to consider is loan repayments. Loans come with interest payments, which could be an obstacle if you’re already tight on money. Talk to someone about it and decide what you can and can’t afford. You don’t want to get financially in over your head and not be able to pay off the loan. The best thing is, if you have already decided how much you’re willing to save and have started, banks may be willing to give you a pre-approved loan. This means, essentially, that when you do find a house you like, you’ll have your money saved, and the bank has already agreed to lend you a loan. It will put you ahead of others wanting to buy that house if you already have the money to pay.
It’s also worth finding out what the place is like. Is it safe? Will there be many people around? Will it be close to places such as school or work? The more you know about where you’d like to live, the better. Start looking at house prices in that area to try and decide how much a house would generally be.
Since it’ll be your house, you definitely want it to be just right for you! Also take a look at how many bedrooms the house has. You might be moving out alone, or with a significant other, or somebody else. Whatever the situation, keep in mind how many bedrooms you’ll need. If you can go for a house that has one extra bedroom, it could be a good idea too. You can rent out the room to help pay off your mortgage, or just have it as a spare for friends and family.
