We are officially entering the holiday season, and we totally get it – you want to enjoy the festivities without losing sight of the prize – getting yourself to a place of financial preparedness to buy a home. We’re here to keep you on track so you can navigate the holiday season while keeping your down payment and closing costs untouched – and maybe increased.
Let’s dive into some practical tips for balancing holiday expenses with your homebuying goals:
Create a Holiday Budget: First things first, set up a budget for gifts, attending events, and entertainment during the holidays. This will help you stay on track and avoid overspending. If you’re not already using one, download a free budgeting app to keep tabs on your expenses and ensure you don’t go overboard.
Gifts That Matter: If your family still loves to give gifts during the holidays, consider suggesting a contribution towards your down payment savings or closing costs. Ideally, you’ll be saving in a separate high-yield savings account. As interest rates are high, use this to your advantage. Research accounts that offer higher interest than regular savings accounts.
Mind Your Credit: While using your credit card for holiday shopping can be convenient, be cautious. High credit card balances will increase your credit utilization rate, which can negatively affect your credit score, especially if you can’t pay them off promptly. Stick to your budget and avoid racking up debt that you can’t manage. Keep your credit utilization rate below 30% to maintain a healthy credit score.
Leverage Your Credit Card: If you have a rewards credit card, take advantage of it. Many accounts enable you to earn points or cash back on holiday purchases. Just remember to stay within your budget and pay off your balances on time.
Stay Informed and Focused: Attend local seminars and webinars on homebuying to stay updated on the latest information. It will help you make informed decisions along your homebuying journey.
Find a Mortgage Advisor: It’s never too early to connect with a trusted mortgage advisor in your community. They can assess your current financial situation and advise you on the amount you should save for your down payment and closing costs. They can also inform you about potential down payment assistance programs that could speed up your path to homeownership.
Remember, it’s all about balance. Enjoy the holidays and create unforgettable memories, but don’t lose sight of your ultimate goal – owning your first home. With a little planning and discipline, you can have the best of both worlds. Happy holidays and happy house hunting!