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Posted by suzette thompson (MONEY FORUMS: 1, Answers: 0)
Asked on January 10, 2017 3:14 pm
Hi Suzette, great question. Saving for a new home is an important goal for many people. Getting started can be fairly straightforward by following a few simple steps. The first thing to do is to determine how much you need to save. Generally this will be some percentage of the purchase price, plus closing costs. Knowing how much you need and when you want to do it, simply divide the funds needed by the number of months away to determine a monthly savings amount. Generally you will use a savings account or other very secure account to accumulate for your down payment so any earnings will be negligible. If the amount you calculate is more than you can afford, begin with the most you can afford. Set up an automatic savings plan. Use a dedicated account just for your home savings and have money direct deposited into the account each pay period. Contribute windfalls to your home savings. This could be money from a tax return, or money received as gifts or from other unexpected sources. Track your progress on an ongoing basis. Increase your savings as possible – be sure to allocate raises to your home savings especially if you started out by underfunding the goal. If you stay disciplined you will probably be surprised by how much you are able to accumulate!