Money

5 Financial Tips To Stay Afloat As a First-Time Homeowner

Story Highlights

  • 1. Cut back on small luxuries
  • 2. Budget your social life
  • 3. Get rid of unnecessary expenses
  • 4. Turn your hobbies into income
  • 5. Use your property to earn cash

Buying your first home is, without a doubt, one of the most exhilarating adventures of your life, but there is no escaping the stress and worry that comes with it.

It is a huge financial commitment and it might feel like those monthly instalments are hitting your square in the jaw every month.

The concept of saving might feel like a distant dream and extra cash is a term that you’ve forgotten about.

With a little work, you might be able to have the best of both worlds. Here are 5 tips to stay afloat once you’ve bought a new house:

1. Cut back on small luxuries

No one expects you to eat bread and live off water for the next twenty years, but there are going to be some things that you are going to have to do without.

People are surprised when they see how much they can actually save by cutting out small luxuries.

A deli sandwich might be tasty and less work than making your own lunch, but by cutting back on that you could save about R1000. Giving up your garage cappuccino in the mornings will save you another R1000.

Rather put it in the bank and use it for something worthwhile.

2. Budget your social life

Socializing can be very expensive these days, especially if you are used to going out a lot and if you have a costly hobby that you need to maintain.

There are many other activities that you can do instead: sign up at a more affordable gym, go jogging or hiking, or join a community event. They are usually free.

When you want to see your friends or family, there is nothing a good old braai can’t solve. Plus you just bought a house – surely you’d want to show it off a bit?

3. Get rid of unnecessary expenses

By the time you buy a house, you already have your fair share of contracts and accounts that you need to pay every month.

These might have been a great idea at the time, but now you might feel like you could do with that extra R500 a month and let’s be honest – you’re not really getting your money’s worth, are you?

Take a careful look at your debit orders and expenses. What do you really need and what are you still using? Get rid of anything that isn’t vitally important to you anymore.

4. Turn your hobbies into income

If you are already saving as much as you can and still struggling at the end of the month, it’s time to think entrepreneurial: try turning your hobbies into income.

It’s the easiest way to make money and you can monetize on something that you love. Baking for local bakeries and after-hours freelancing has become more and more popular.

Many people are working two jobs in order to keep their savings intact. There is a whole community of DJs, home-knitters, photographers, and bloggers all doing what they love as a second source of income.

5. Use your property to earn cash

A great way to make extra cash is to use your brand-new property.

You can rent out the cottage or a room, or you can sign up on Airbnb.

Many people opt for Airbnb because it provides a second stream of income without worrying about a permanent resident. Short-term letting can be very unpredictable and with a tourist, you can easily convert the spare room into a makeshift hotel room.

Whichever route you choose, just remember: sometimes you have to make some sacrifices to reach your goal.

Stay positive and keep a clear image of your goals. This way you will have better control over your finances as well.

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