The New Year is here and it's time to evaluate our goals. You have many decisions to consider when setting your New Year goals but if one of your goals is to buy a home, you'll want to set strategic goals that can help you stay focused and on track. Setting goals makes you accountable and motivated so here are 5 goals to keep in mind for the New Year.
1. Get Determined to Save More
If you are already saving, aim for more. Saving may be challenging because of the many responsibilities you may have. But consider these alternatives to save.
First, try to increase your 401(k) contributions or max out if you can (there are ways to withdraw funds for the purchase of an owner occupied home in the future if needed). Another option to save money is by setting up automatic transfers directly to your savings account without passing your hands. In this case, you avoid overspending money.
2. Budget for All Your Money
Setting a budget can be a challenging task, but a vital consideration to achieve your goal. It helps you understand how you allocate your income and expenditures. Setting a budget will give you clear guidelines for where your money goes.
A budget helps you identify essential expenses and areas where you are spending a lot of money. A budget can help you cut back on some unnecessary expenses and help you boost your savings. And if you are planning to buy a home in the near future, it can help you forecast your comfort level based on different potential monthly payments.
3. Pay Your Credit Card
If you have a credit card debt, determine to pay it down or in full in the New Year. Having credit card debt can affect your credit score, and credit card interest rates could be upwards of 20%, meaning your money is going towards interest payments instead of savings.
Paying a credit card debt can also increase your chances of securing a higher loan in the long run. You also enjoy flexibility with your budget since you don't have to set aside money to pay a credit card debt at the end of the year. This helps you set aside money to cater to other essential expenses.
4. Improve Your Credit Score
Improving your credit score is another essential goal if you're planning to buy a house. If you have scores below 700, consider improving them to prepare for your purchase. This is an essential consideration that can open many opportunities, especially when applying for loans in the future.
There are many ways to improve your credit score. This includes paying your bills on time, clearing debts, limiting the number of open accounts, and paying revolving account balances.
5. Check Credit Score and Report Often
Checking your credit score should be an ongoing habit every year or every 6 months. This is an important goal to avoid any surprises when you're ready to buy a home.
Unfortunately, with today's increased technology, fraudsters can manipulate systems, credit card scores and reports. Checking your report often helps you detect fraud and take the necessary measures to keep it safe. There are multiple ways to check your credit report for any missing payments, suspicious actions, or debts, including going straight to the credit agencies.
The Bottom Line
Applying the above tips can help you stay focused on achieving your goal of purchasing a new home in the near future. The journey may be challenging, but it is always worth the sacrifice if you stay determined. If you are seriously considering buying a home in the New Year and looking for assistance, let First Savings Mortgage help you make that dream a reality.