Buying real estate is likely to be one of the most significant financial steps you’ll ever tackle. It’s right up there with paying off debt and saving for your dream wedding. If you’re working on your financial independence, you’re probably wondering exactly how to save up for a house.

Even for those on a high salary, it’ll be a couple of years before you have enough for a deposit. Read on to learn what to expect from the home buying process.

1. Decide on Your Deposit Amount

One of the most crucial home buying tips you’ll ever need is determining how much deposit you want saved.

On the conservative end, some financial advisors say you should aim for 20 percent down on your mortgage. And a deposit of this size may help you get a mortgage easier because you don’t have to get private mortgage insurance. However, you may still be able to get a loan even if you have a deposit under this amount.

Another step in deciding how much to save for a home is knowing what size and value of the home you want. This will determine the dollar amount you need to save—whether you aim for a 3% or 20% deposit.

2. Pay Down Your Debt First

Before investing in real estate, make sure you have your debt under control—particularly any high-interest consumer debt.

Having unpaid consumer debt makes it harder to save, and it can also negatively affect your credit score. A good credit score is essential when discussing mortgages with lenders.

If you need help boosting your income to save debt, look for advice on passive income on websites like activedutypassiveincome.com or start a side hustle.

3. Trim Your Budget

The cost to buy a house might seem impossible at times, especially if you’re on a low income. If you’re struggling to put aside the money you need for a deposit, it’s time to take a long, hard look at your budget.

Consider these ways to reduce your outgoings:

• Cancel app and entertainment subscriptions
• Refinance or consolidate your loans
• Compare car, home, and health insurance companies to get a better deal
• Reduce your water and electricity use
• Reconsider your cellphone and internet provider

To work out other budget categories that may be overinflated, track every dollar you spend for at least a month.

How to Save Up for a House Revealed

Learning how to save up for a house isn’t something that happens overnight. From asking for a raise to trimming your budget, there is a wide range of strategies you need to educate yourself on. And if you’re buying with a partner, make sure they’re on the same page as you when it comes to the sacrifices you’re willing to make to reach this lifetime goal.

For more helpful homeowner tips and tricks, browse the other articles on our website.

Jane