How should you start saving for your future home? The joy of receiving your first paycheck is unlike any other. Finally, you’re one step towards financial independence and making your dreams come true. But, as they say, with great power comes great responsibility. Financial freedom is synonymous with taking charge of things when it comes to money matters.
It’s a typical story to hear that young Filipino professionals drain their salaries right after payday. After a while, the reality sinks in that you can’t keep on living life this way. Factors, such as building a family, starting a business, and working towards your other goals, make it clear that you need to save up to be able to invest in assets that matter to you.
One of the most significant milestones in a young professional’s life is purchasing their first home. Whether it’s a simple condo or a complete house and lot, the fact is big purchases need a lot of preparation. As real estate properties don’t depreciate, buying a home is synonymous with making your first investment, as well.
If you’re wondering how you can find your footing when it comes to finances, let this article guide you in providing financial management tips in buying your first home.
1| Decide between a condo or house and lot.
What do you want to invest your money in? That’s the first and most important question, as this will affect your savings plan. Getting a condo is cheaper, but you have to consider the space and the neighborhood you’ll be staying in.
There are many perks of living in a condominium, as they are usually built close to establishments like schools, malls, groceries, and churches. Plus, here’s some condo living 101: small spaces are easier to maintain, so that’s less of a hassle for you in the long term, too!
A house and lot is a property you can pass down to further generations, with a space that you can customize to your liking. This is perfect for big families or those who need the privacy and comfort of a village—but it does come with a heftier price tag.
2| Stay within your budget.
Living within your means is a healthy way to achieve your long-term goals, as it puts you into the perspective of what you can and can’t afford. You may be able to spend on luxurious things during payday, but if your money gets drained immediately, then you won’t be able to enjoy this lifestyle when you get older.
Saving a portion of your salary and learning how to budget properly are skills you should be able to master in your 20s, so you don’t get haunted by unwanted financial trouble in the future.
3| Monitor your spending.
Where does your money go? You would be surprised to find out that you could be spending a lot on unnecessary things like having dinner with friends in fancy restaurants every other day or buying expensive novelty snacks like milk tea during your break.
Once you start keeping track of your finances, you’ll see all the things that you could be overspending on. From here, you can adjust, and you’ll be able to stretch your budget and know that you’re taking better responsibility for your money.
4| Pay your debts on time.
Paying your debts is a significant component of your credit score. When the time comes that you are ready to buy a real estate property, a credit investigator will look into your current financial standing and evaluate whether or not you will be able to be granted loans or financing options for your purchase.
Paying your debts on time will not only help you get a higher credit score, but it will also train you in paying future mortgages. The faster you pay off your debt, the better.
There’s no such thing as too early when it comes to saving your money. The goal here is to strive for balance. Make an effort to work on your goals little by little while still enjoying your youth. You don’t want to put an insane amount of pressure on yourself that you become too worried about the future—but it’s important to realize where you can improve your financial habits and start planning for the future home.