6 Ways To Save Up For Your Dream Home
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- by Rebusel Duphilco Admin,
- January 10, 2022
Buying your dream home is easier said than done. Many have taken on the challenge and successfully got their dream homes through sheer determination and hard work, just like a former janitor and a domestic helper for example.
But, do you really need to be in a rags-to-rich story to buy your dream house? For the average income-earning Filipinos, there are at least six ways on saving to buy your dream home:
1. Practice allocating an estimated mortgage payment every month and deposit it in a money market account.
Aside from saving for a deposit, you need to start saving an estimated amount needed to pay
off your monthly mortgage, including expected property taxes, insurance, and maintenance
costs. You may also consider placing them on money-market mutual funds. Although they earn
lower returns than stocks, equity, and balanced funds, the returns are arguably better than
placing your savings in a savings account.
2. Get the family involved in the budget.
Buying your dream home is a team effort, regardless of whether your kids plan to get their own
homes in the future. The key to achieving your target savings is by sticking to a budget fully
supported by everyone in the household, including the kids. Your dream home could possibly
be passed on to the next generation as a vacation home or the future house of one of your kid’s
family. If your kids do not have plans to live in it, they can have it leased out and earn rental
income in the process.
3. Augment your income.
Thanks to the Internet, more and more Filipinos are using the web to augment their monthly
income by either selling goods or offering services online. Before investing your time and
energy in a sideline job to augment your income, be sure to ask yourself four questions:
- How much in extra income do I want to earn?
- Am I good at this online job?
- How much time can I devote to the business/job in a week?
- How competitive is the industry?
For example, prior to working full-time at ZipMatch, I kept an 8-hour regular copy-editing job
for an online client and only took grunt work or projects that did not require too much
brainpower or time, like video and audio transcription and 150-word news recaps. I usually
declined ghostwriting work for e-books, as they involved extensive research and fact-checking.
4. Free up your income.
Steve Lander for SFGate.com said that the biggest hurdles in making continuous mortgage
payments are growing debt and expenses. For example, in a 2013 Study of Lifestyles, Attitudes,
and Relationships (SOLAR) by Sun Life Philippines, the average Filipino household spends 37% of
the home’s monthly income on food, which is a little over three times the amount allocated for
mortgage or rent. Although food is an important expense, financial expert Francisco Colayco
said that food is considered a general category and could include junk that we don’t actually
need.
Buying fresh and organic food, canceling or downgrading services like cable and Internet
access, and paying down your high-interest rate credit card balances are some of the lifestyle
changes that you and your family would need to do to free up money to buy your dream home.
5. Use your starter home to pay for your dream home.
Do you know that you can use your first house to get your dream home? Major banks like
Security Bank are now offering home equity loans, which allow home buyers to borrow against
the value of their first homes (or equity). You can find out how much you can borrow from the
bank by answering a few questions online.
6. Increase your government contributions.
If you are planning to get your dream home via Pag-IBIG Fund, you can also practice allocating
part of the estimated mortgage payments just by increasing your monthly contributions up to
P5,000. According to Pag-IBIG Fund officials, a member can enjoy as much as 5% dividends on
savings and can avail a higher loanable amount on both housing and short-term loans.
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