2020 has been a rough year for many Americans. Many families have had to face financial uncertainties as a result of pandemic, shutdowns, and losses of businesses across nearly every sector. 2021 looms large. It is a New Year, one we like to think of as a fresh new start. If you’re thinking of buying a home in the new year but still need to save, your time to save starts NOW!
These are a few of our top tips for building your mortgage budget for 2021!
Start Building a Better Budget
A critical first step in the process of saving is budgeting. If you don’t know exactly where your money is going each month, it’s impossible to divert money toward your down payment fund.
Sit down with your bank statements, credit card statements, etc., and see where you’re spending the most money each month. Also pay attention to how much you spend each month on essentials, such as:
- Student loans
The better you understand how you spend your money, the greater control you have concerning how much money you save and where that money comes from within your budget.
Reduce Your Spending
Know how you make a run for Starbucks once a day? We suggest you plan to skip that purchase for a while. That doesn’t mean you can’t make an occasional treat out of it, but you do need to be aware of how costly this small habit happens to be. For instance, a $4 caramel Frappuccino per day for 30 days is $120 you could be saving for a mortgage down payment. Over the course of a year, it amounts to $1,440.
Skip a Vacation
Did you know that the average family of four spends approximately $4,500 on vacation? That’s a huge chunk of change! While we’d all love to go somewhere cool for vacation, this might be the perfect year to skip it and stay home instead. In fact, you could have a staycation with the family or treat yourself to a spa day at home. Just imagine if you were to suddenly add $4,500 to your mortgage budgeting efforts in one lump sum!
Put Money in Your Savings
Not only is it a great way to save for mortgages in 2021 but it is also a good habit to get into. Set aside a specific percentage of your paycheck each month and transfer those funds to your savings account. This might take a little financial juggling to determine how much you can afford to save each month and still pay your bills, but it is a good decision now and in the future.
Consider a Side Hustle
Side hustles are easier than ever and can help you set aside additional money rather quickly. These are a few options to consider.
- Freelance work. Do you have a skill or talent like writing, accounting, computer programming, graphic design, or even building websites? These are services people can and do pay for.
- Becoming a dog walker. As people begin returning to work outside of the home, the need for dog walkers to help handle restless pooches is on the rise. You can get new “gigs” through mobile phone apps or by posting signs around town.
- Drive for a ridesharing company. Ridesharing companies like Uber and Lyft are once again experiencing greater demand. However, Uber Eats and similar services may net even more “gigs” until the pandemic officially ends.
- Pet sit. Every once in a while, people need pet-sitting services when traveling for business or personal reasons. There are apps that can help you get started.
As you can see, there are plenty of avenues to explore for income on the side.
To Sum It Up
Whether you are reducing your spending, increasing your income, or automating your savings efforts, these steps can help you with your mortgage budgeting needs for 2021 and beyond. Contact Mid America Mortgage today to learn how we can help.