The beginning of summer always brings a fresh new wave of college grads excited to begin their journey of adulthood. If you’re fresh out of college and settling in at your first job, homeownership might be a far ways out of your mind. However, there are a lot of beneficial things you can do in your 20s to better position yourself to buy a home when the time is right. Here are our tips on how to prep for homeownership in your 20s.
Save, Save, SAVE! 
Save as much money as you can as early as you can. Create a savings plan and set a soft deadline for achieving your goal. Create a dedicated bank account just for your “housing fund” and quarantine it from any spending. If remembering to set aside money seems like too much of a task, tell your payroll department that you want a fixed amount sent to your specific savings account every payday via direct deposit. This way your savings will happen regularly and automatically.
Prioritize Needs Over Wants
Be sure to prioritize your needs over wants in order to avoid overspending. Identifying the difference between needs and wants is the foundation of money management. This enables you to prioritize and figure out what expenses are necessary and which ones can be deferred. Start out by defining what exactly a “wants” and “need” is to you. This way, you’ll have a guideline to fall back on when your mind starts convincing you that “wants” are really “needs.” Be as objective as you can, stick to your guidelines, and watch your savings add up.
Build Your Credit
You credit score is one of your most valuable assets when it comes to qualifying for a home loan, so it’s important that you build it up properly over time. The first step to building a healthy credit profile is knowing your credit score and keeping tabs on it in case errors should appear. Secondly, you should build your credit up wisely with on-time payments and manageable loans. Paying down debts early and making on-time monthly payments on your student loans, rent, utilities and credit cards can start boosting your score in as little as six months!
By following these simple tips to prep for homeownership in your 20s, you’ll be set to buy when the time is right. Happy saving!
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