It may sound like a far-flung dream, but the average person can buy themselves a house with cash and go totally mortgage free. It’s going to take some time and a lot of hard work, but a bit of diligence now means that you’ll be able to enjoy your time and money a lot more in the future when you aren’t worried about keeping up with payments.
Why Buy With Cash
There’s one major advantage that comes with buying a home cash, and that is that you will not have a mortgage. Why is that a good thing? For a few reasons. First, you’ll be freeing up a lot of your earned income, which you can translate into savings, your business, a vacation, or anything else you may want. Second, you won’t be susceptible to market fluctuations. With no mortgage, there’s no way to be upside-down on a mortgage. Third, you’re the one in charge. This is going to save you a lot of paperwork and headaches from the bank in the beginning, but later on it’s also going to give you a lot more flexibility in terms of what you can use your home equity for.
Size Yourself Properly
If you’re looking to pay cash for a home, you’re going to have to set realistic goals first. A downtown three bedroom fully rehabbed condo might be your dream, but a ten year old townhome fifteen minutes outside the city isn’t going to hit your pocketbook nearly as hard. Decide on what you need for a functional space, and be ok with the fact that you may not get everything you’ve ever wanted on top of that. Look at houses that are realistic for your price range, both in terms of size and area, and you’ll find a lot easier to save than if you’re shooting for something you can’t reasonably achieve.
Once you have a goal in mind, start saving everywhere you can. It’s going to take every extra cent you have. Buy store brand at the grocery store, avoid any unnecessary major purchases, have automatic deposits set for your savings account. You should be dumping as much as humanly possible into your home savings. It’s going to be hard, but it will be worth it. Take a look at some of your higher expenses, too, and see if you can cut costs there. Re-evaluate the amount of insurance you have with all of your policies, downsize your car, do whatever you can to filter money into your fund as fast as possible.
Prudent saving is important, but if you’re really looking to get into that new home sooner rather than later, don’t depending on cutting costs alone. Start with side gigs and put all your secondary earnings into your new home fund. It can be something that you love like performing or selling your art or crafts. It can be something more prudent, like freelance writing or consulting. Whatever it is, stick to it until you’ve got the money you need.