Saving Money While Paying for a Home
It may seem odd to think about saving after making such a large purchase, but now's actually a great time to save.
Since you've already spent a considerable amount of time-saving money to buy a home, hopefully, it's become second nature and you can keep it going. Simply apply the same principles to saving for other major life events like college for your children or your retirement.
Try these tips for creating a saving strategy while paying your mortgage:
- Keep cash handy. Save at least three months worth of income in a cash emergency fund, in the event you get laid off or injured.
- Prioritize what you save for, based on urgency and need. If your daughter plans to attend college next year, you should be saving for that now. Likewise, if you don't plan to retire for several years, focus on more urgent expenses while setting aside a small amount in a 401k or IRA.
- Pay more if you can. If you have enough cash on hand and no debt other than a mortgage, you may want to pay more than your minimum monthly mortgage payment and reduce your overall mortgage interest. Before doing so, check whether your lender charges penalty fees for making extra or higher repayments.