My Savings Plan to Buy a House

Matthew Ward · Jul 21, 2022

It’s been a few months since I moved into the basement and in that time many things have changed. I moved here with the primary intention of saving for a down payment and improving my financial position. I’ve made a lot of progress to that end and now I’m focusing on the second phase. You see, up until a few months ago I thought I had a good paying job, nothing extravagant, but something that would allow me to live a comfortable life. With the changes to the market and the economy that idea has quickly vanished. I started trying to save as much money as possible and now that my savings is where I needed it to be, it’s time to tackle some other areas of my financial situation.

I’m going to break this down into 3 components. These are the three areas of my financial plan to buy a house.

1. Save as Much as Possible

This part of the plan is pretty simple. Spend less on things I don’t need and put as much money into my savings account as possible. The first and biggest step to accomplish this was to move back home with my parents. Is this where I want to be, no. Is this the best place to avoid paying astronomical rents, absolutely. Even if I spend up to a year here, the savings outweigh any inconvenience that come with living with your parents.

2. Pay off Debt

This is the part that I thought I’d take care of once I moved into a house. But now that I’ve got my savings high enough and the market isn’t quite where I want it to be as a first-time home buyer, I figured now is the best time to pay off any debt I have. I’m doing a combination of approaches. Any small credit cards I’m snowballing to just get rid of them, one less monthly payment I have to worry about. Any larger debts I’m making large payments to get them down as much as possible. I don’t want to stop saving so I’m only redirecting a few paychecks to this. Once I get larger balances down, I can continue to snowball them while I move back to my original savings plan.

Another important reason to eliminate or pay off as much debt as possible before buying a home is the list of unexpected items you’ll need to buy when you move in. Now I’m not saying you have to go out and buy all kids of stuff all at once. But if you’ve never needed to own things like a lawn mower you will need to purchase one. I started making a list of potential items I’d need, but after I listed a few items, I couldn’t think of anything else. So this won’t necessarily be a long list, but better to have the ability to buy these items than not. There might also be some small projects that you need to take care of when you move in.

3. Earn More Money

Now this is easier said than done, but there are a few things to do here. First, see if you can earn more with your current job, assuming you have one. I am going for a promotion to earn more money. I calculated what I need to earn to get up to a yearly salary I’d be comfortable with, and it’s not too far from what I’m making now. Any increase would be a welcome change.

The second option here is to earn a supplemental income. I’ve been kicking around a few ideas in my head for this and it’s time to sit down and formulate a plan. There are unlimited opportunities online and I intend to take advantage of them. I’m not looking to become a millionaire but earning a few extra hundred to thousand dollars a month wouldn’t hurt. Actually, it would help a lot!

So, I think I’m in a good place financially. Much better than if I continued to rent and throw money away. Next, I need to start focusing on my health and body, this has always been an area I’ve neglected, and it needs to happen.