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20 [Best] New Year’s Resolutions for Buying a Home in 2024: How to Make and Keep them

Posted by AmorTulum on 5 de January de 2024
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The 20 [best] New Year’s resolutions for buying a house in 2024: how to make and keep them

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Introduction

Welcome to a new era of goals in obtaining a new home.

As 2024 approaches, it’s time not only to celebrate, but also to renew our resolve with New Year’s resolutions. Among these resolutions, the goal of many is homeownership, an ambition that brings us joy, personality and purpose. This article will guide you in making effective New Year’s resolutions to realize your dream of owning a home in 2024.

2024: A year to get into the house of your dreams

The year 2024 brings with it a new wave of opportunities to get one step closer to your dream home. Imagine hosting dinner parties in your impeccable kitchen or reading a book in the comfort of your own backyard oasis. With proper planning, patience and determination, you can make these fantasies a reality. It’s time to take hold of your dreams and make the resolution to buy a home a top priority.

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Why New Year’s resolutions?

Owning Your Space: The Essence of Decision Making

Setting a resolution helps you focus on your ambition and guides your actions throughout the year. When it comes to buying a home, owning a space isn’t just about acquiring property: it’s about achieving a sense of independence, stability and security. By setting a home-buying resolution for the new year, you’ll formulate a clear path toward owning a space that reflects your personality and meets your needs.

New year, new house: More than an investment

The prospect of buying a home in the New Year goes beyond the financial transaction. It’s about building a comfortable space for you and your loved ones, creating lasting memories and carving out a little corner of the world, tailored specifically to your needs and desires. It symbolizes personal growth, financial maturity and lays the foundation for a rewarding and secure future. A new year, a new home is therefore an investment in the quality and prosperity of your life.

Concrete and measurable purposes for buying a home

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How to keep your home buying resolutions for the New Year

Setting well-defined goals is crucial when aiming for something as important as homeownership. Instead of a broad resolution like “buy a house,” try something more specific like “save $9,000 for a down payment on a three-bedroom house in the Riviera Maya.” This method allows you to prioritize concrete actions, such as reducing unnecessary expenses and increasing your savings rate. By making your home-buying resolutions concrete, you’ll give yourself a clear path to follow throughout the year.

Make sure your homebuying goals are measurable

To make your goal of buying a home measurable, it is essential to define quantifiable metrics. For example, if your goal is to save a specific amount for a down payment before the end of the year, you can set aside a fixed amount each month. Or, if what you want is to improve your credit score, you can check your progress through periodic reports. Tracking these quantifiable goals not only keeps you informed of your progress, but also motivates you on your path to homeownership.

Feasible and relevant objectives for the purchase of a house

Achievable objectives when buying a home

When preparing for homeownership, it is essential to set achievable goals to avoid frustration and burnout. Avoid aiming to go from zero savings to affording a new home in one year. Instead, focus on smaller, achievable goals, such as improving your credit score, building a down payment fund or getting pre-approved for a mortgage, that will gradually culminate in your ultimate goal. Making your homebuying resolutions attainable increases your sustainability, keeping your dream home within reach.

Aligning objectives with reality

Taking into account your current financial situation, your personal circumstances and the realities of the real estate market is essential when setting your home buying goals. Before deciding on an ambitious plan like buying a luxury downtown apartment, consider your income, debt, savings, family needs and market trends. Always keep your “why” in mind and prioritize the factors that are truly important to you, such as affordability, access to amenities or school district qualification. Aligning your home buying goals with reality increases your viability and sets you up for success.

Establish time objectives

Advantages of fixed-term home purchase plans

Setting time-bound goals for buying a home can structure your plans and make them more urgent, prompting you to take immediate and consistent action. For example, if your goal is to save a specific amount within a year for a down payment, this creates a timeline that motivates you to stay dedicated. Perhaps you want to pay off a specific debt before you apply for a mortgage; setting a timeline adds pressure and helps you channel your efforts in the right direction. Time-bound plans also make it easier to measure progress, which increases your confidence and determination as you get closer to your dream of buying a home.

Establish resolutions with concrete deadlines

Setting time-bound resolutions involves setting a clear end point or deadline for your goals. Let’s say your resolution is to save $10,000 for a down payment on a house. Break it down into smaller, more manageable tasks. For example, decide to save $800 a month. This means that, by the end of the year, you will have reached your goal. Putting deadlines on your resolutions structures your goals and keeps you motivated, as you can mark progress and celebrate small victories throughout the year.

Key strategies to achieve these objectives

Create an emergency fund

On your path to homeownership, building an emergency fund should be a key strategy. This fund acts as a financial safety net against unforeseen expenses. Cary, a financial advisor, suggests starting small, even if it’s a small fraction of income at first, with the goal of saving 10% of income. She recommends analyzing the spending plan to identify what can be cut or reduced to allow for this savings. This process can take time, but setting up an automatic payroll transfer to this fund helps ensure that savings occur on an ongoing basis. According to Cary, ideally, the emergency fund should be sufficient to cover living expenses for six to 12 months. This simple financial goal can give you peace of mind on your path to homeownership.

Increasing productivity through financial planning

Financial planning is a critical strategy for achieving your home buying goals. Michael Hershfield, CEO & Founder of Accrue Saving, encourages you to spend time discussing your individual financial goals with a partner or financial planner. Periodically review and adjust your financial plan to accommodate changes in your life and priorities. This includes budgeting, tracking expenses, and evaluating the growth of your savings and income. Through systematic financial planning, you can improve your productivity by making informed decisions, preparing for uncertainties and effectively managing your finances to realize your dream of homeownership.

Learning to live below your means

Getting your dream home may require some changes in your lifestyle and spending habits. Learning to live below your means forces you to spend less than you earn. As Andrew Housser, co-founder of Achieve, emphasizes, living below your means allows you to save for your goals and provides a cushion against unexpected expenses, thereby reducing stress. Cultivate habits such as limiting impulse purchases, cutting back on dining out, canceling unused subscriptions and practicing mindful spending. This lifestyle shifts your attention from spending to saving, accelerating your path to homeownership.

Reduce expenses while searching for your ideal home

Debt reduction and consolidation

Reducing your debt is critical when you plan to buy a home, as it improves your debt-to-income ratio, a determining factor in getting approved for a mortgage. Money expert Alia Dudum of LendingClub suggests refinancing or consolidating high-interest credit card debt into personal loans, which offer monthly payments and fixed interest rates. Negotiate with your current creditors to improve repayment terms on existing debt. These approaches ease the burden of indebtedness and put you in a better position to buy a home.

Debt consolidation, recommended by Matt Schulz, chief credit analyst at LendingTree, is another notable strategy. Here, high-interest debts are bundled into a single, lower-interest debt, making repayments more affordable and reducing unnecessary interest. You might consider a 0% balance transfer credit card or a low-interest personal loan. Surprisingly, 76% of people who asked their issuer for a lower interest rate in 2023 got it, highlighting the potential power of negotiation.

Reduce unnecessary subscription fees

In the age of digital subscriptions, a significant portion of our income can inadvertently go to subscription services. Streaming platforms, gym subscriptions, magazines and monthly subscription boxes can add up and overburden your budget. Reevaluate these expenses and eliminate unnecessary or underutilized subscriptions. As suggested by financial expert Jeff Miller, CFEI, U.S. vice president of Nudge Global, an audit of your subscription fees could save you $10 to $200 a month. Over time, this money saved can make a significant difference in your home-buying fund.

Limiting the excessive use of credit cards

Although credit cards offer benefits such as cash back, points, collateral protection and even travel insurance, their overuse often leads to mounting debt, especially if balances are not paid in full each month. In 2023, 43% of all credit card holders reversed their debt, meaning they carried over an unpaid portion to the next month. If left unchecked, this trend could translate into high indebtedness and hinder home buying plans. Use of credit cards should be limited to necessary purchases and payment of utility bills, and balances should be settled monthly. Also, consider switching to credit cards with no annual fee, such as the Chase Freedom Unlimited (which returns 1.5% per dollar spent) or the Citi Double Cash Card, to reduce costs.

Control essential financial aspects

To take full advantage of the financial wellness benefits offered by the company.

According to Mindy Yu, CIMA’s Chief Investment Officer, only 38% of workers fully utilize the financial wellness benefits offered by companies. These benefits typically include 401(k) or 403(b) contribution programs, stock purchase plans, tuition reimbursement and even access to financial advisors. It’s important to have a thorough understanding of these benefits, as they can significantly increase your savings potential and help you in your home buying efforts. Optimize your contributions to any company matching retirement accounts to effectively get “free money,” which in turn can improve your savings and fiscal health. Be sure to ask about and thoroughly understand all the financial advantages your company offers so you can take full advantage of them.

Keeping up with interest rates

Interest rates have a big effect on real estate financing, so it’s beneficial to keep an eye on trends and news from the Federal Reserve. In addition, the choice between a fixed or variable rate for your mortgage can have a long-term impact on the cost of your home purchase. It is wise to be aware of these elements to strategically plan your home purchase.

According to Matt Schulz, chief credit analyst at LendingTree, smart borrowers also negotiate their rates. A LendingTree survey revealed that 76% of people who asked their card issuer for a lower rate in 2023 were successful, with an average reduction of about 6 percentage points. This fact demonstrates that even beyond the actions of the Federal Reserve, as an individual, you still have some control over the interest rates you pay. Therefore, keeping up with interest rates can be a valuable strategy toward your dream of homeownership.

Maximizing your retirement account contributions

According to Brett Holzhauer, M1’s Personal Finance Expert, the maximums for investment accounts such as 401(k)s and IRAs will increase in 2024 to $23,000 and $7,000 respectively. You have all year to fill these accounts, and until tax day in 2025 for IRAs. Making the most of these accounts by selecting investments that fit your needs could save you taxes and grow your wealth.

Remember that withdrawing money from retirement accounts to fund a home purchase should be a careful decision, as it could offset your long-term retirement savings plan.

Before making any decisions, explore all your options and consult with a tax, legal or personal investment professional, as this could be part of your home buying savings strategy.

Preparing the purchase

Pre-approval of the mortgage and setting a comfortable budget

Nick Narodny, CEO and Founder of Aalto, recommends getting pre-approved to learn your purchasing power and establish an appropriate monthly budget. This step involves having a mortgage lender review your finances and come to a tentative agreement on how much they would be willing to lend you.

A pre-approval letter does not guarantee a loan, but it shows sellers that you are a serious buyer. It also helps you understand the price range you can afford, avoiding the disappointment of falling in love with a home that is out of your budget.

When setting a loose budget, be sure to factor in the additional costs associated with homeownership, such as insurance and maintenance expenses. Talking to an accountant or financial advisor can be advantageous in preparing a sound financial plan for your new home.

Systematic checking of the credit report

Periodically reviewing your credit report is another smart financial habit to adopt when you want to buy a home. Your credit report provides a detailed look at your credit history, including information about your credit accounts, payment history and outstanding balance. If there are any changes to your credit score, your credit report contains the answer as to why.

According to Margaret Poe, TransUnion’s Chief of Consumer Credit Education, reviewing your credit report is especially important before making any major purchase, as it can help you spot potential errors or signs of fraud. annualcreditreport.com provides one free credit report a week, which you can use to constantly track your credit health. This proactive measure can pave the way for a smooth home buying process.

Maintaining good insurance coverage

Insurance plays a crucial role in protecting your future home. Bryan Davis, executive vice president and principal of VIU by HUB, stresses the need to reevaluate insurance policies to account for changes in home value, expanded coverage needs, lifestyle changes or new financial goals. Given that 22% of homes are underinsured, make sure you have adequate insurance coverage to protect your future property against potential risks such as fire, theft or natural disasters.

Insurance brokers can help you clarify complex terminology and offer crucial advice on the ideal insurance approach that best suits your needs. So, as you work on your home buying resolutions for the new year, remember to consider and maintain adequate insurance coverage.

Conclusion

Ensuring firm targets with manageable benchmarks

When you set out to make your dream of homeownership a reality in the new year, it’s critical to keep your resolutions firm but flexible. Instead of focusing solely on the big picture, make your resolution journey more manageable by setting smaller, achievable benchmarks along the way. For example, instead of the overall goal of buying a new home, focus on a series of smaller steps that will get you there, such as saving a certain amount a month, improving your credit score or even looking at options in the neighborhood.

These smaller goals serve as stepping stones to the final resolution, making the process less overwhelming and more achievable. In addition, this approach allows you to make necessary adjustments as circumstances evolve. Always be prepared to recalibrate your goals as needed, maintaining momentum and progress toward your ultimate goal.

Maintaining motivation to make the dream of buying a home a reality

Staying motivated while working toward the dream of buying a home can be challenging. Remember not to lose sight of your ultimate goal or your “why”: your desire to have a sense of belonging, the freedom to personalize your space, host family and friends or provide stability for your children.

Celebrate your small victories and progress, no matter how small they may seem. Saving $100 more this month, improving your credit score a few points or reducing the number of potential neighborhoods are victories worth recognizing and rewarding.

At the same time, be forgiving. There may be months when you can’t save as much or when unexpected expenses take you a little further away from your goal. Practice self-compassion when these instances arise. Remember that the road to homeownership is a marathon, not a sprint. Each small step toward your goal reaffirms your commitment to making your dream of buying a home a reality.

Never hesitate to seek support. Sharing your goals with friends or family creates an extra level of accountability and encouragement. You may find that their support provides the extra motivation you need to keep going.

Follow these strategies and you’ll have the keys to your dream home in your hands sooner than you think.

Frequently Asked Questions (FAQ)

What is the best way to set my New Year’s resolutions for home buying?

Setting New Year’s resolutions for home buying involves a thoughtful and practical approach. The best way to do this is to employ the S.M.A.R.T. (Specific, Measurable, Achievable, Relevant, and Time-bound) goal framework.

  1. Specific: Clearly define what you want to achieve. Instead of saying “buy a house”, specify the type of house, location, etc.
  2. Measurable: Your goal should have tangible indicators of progress. For example, saving a certain amount for a down payment is a measurable goal.
  3. Achievable: Your goals should be realistic, taking into account your financial situation and capacity. Take into account your income, savings and possible financial obligations.
  4. Relevant: Your goal should be important to you and align with other relevant aspects of your life, such as your long-term financial plan, career prospects and family needs.
  5. With deadlines: Set a concrete deadline for reaching your goal. This adds a sense of urgency and helps track progress.

Combine these guidelines with consistent motivation and you’ll be well on your way to meeting your home buying goals.

How feasible is it to aspire to homeownership in the New Year?

The feasibility of buying a home in the new year depends largely on your current financial situation, the real estate market and, most importantly, your commitment and planning. Here are some considerations to make sure your goal of homeownership is attainable:

  1. Advance planning: Being proactive in planning can save time and money, as Nick Narodny, CEO and founder of Aalto, says. Advance planning geared to your specific needs, wants, desires, obstacles and desired lifestyle will make the home-buying process easier.
  2. Financial health: Evaluate your savings, income, credit score and potential down payment. If they are not solid, you may need more time to build a secure financial foundation.
  3. Real estate market: The real estate landscape may also influence your plans. Are current rates favorable or is it a seller’s market? Getting pre-approved for a mortgage can help you discern what type of home you can afford now.
  4. Personal circumstances: External circumstances, such as job stability, family plans or other commitments, may influence the timing and feasibility of your home buying process.

While this may seem daunting, remember that every journey begins with a single step. With the right planning and determination, aspiring to own a home in the new year can be an attainable and achievable goal.

How can I ensure success in achieving my home buying goals?

Ensuring success in achieving your home buying goals involves a mix of diligent planning, consistent effort and strategic financial management. Here are some strategies to achieve this:

  1. Specific Objectives: Set specific, measurable, achievable, relevant and time-bound (S.M.A.R.T) objectives. Having clear goals helps track progress and maintain discipline.
  2. Emergency fund: Establish an emergency fund as suggested by a financial advisor, Cary. This will serve as a safety net for unexpected expenses.
  3. Spending audit: Periodically audit your spending to identify potential savings. Cut unnecessary subscriptions, as suggested by financial expert Jeff Miller, CFEI, U.S. vice president of Nudge Global, or reduce credit card usage to save more.
  4. Personal finance practices: Apply sound personal finance practices, such as reducing debt, building good credit and taking advantage of financial wellness benefits, if available in your company.
  5. Compassion for yourself: Finally, remember to be compassionate with yourself. Success doesn’t come overnight and sometimes there may be setbacks. Keep the faith, celebrate the small milestones and keep moving forward.
  6. Professional advice: Ask professionals such as accountants, insurance brokers or financial advisors for advice. They can provide invaluable information to strategically position yourself as a strong buyer and make sure you’re making a good investment in your new home, even if you’re not ready to buy right away, as Nick Narodny, CEO and Founder, Aalto, suggests.

By following these steps and taking a disciplined approach, you will ensure success in achieving your home buying goals.

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