While renting seems like the most logical way to live, you could be selling yourself short if you have not yet explored the possibility of buying a home.  Or maybe you have had that nagging suspicion that you are wasting your money by helping to build someone else’s equity instead of your own.  While there are some benefits to renting, if you are even just beginning to think more seriously about buying a home, it is never too early to plan.  If you are young and have only just begun your financial journey through life, you will probably need to start finding ways to save more and spend less in order to realize a future dream of being a home owner.

As mentioned earlier, perhaps the biggest advantage to owning your own home is that your monthly payments, unlike rent, are always building your own equity and not your landlord’s.  The key for most people is going to be saving money and developing good saving habits.  You need to learn how to consistently spend less money than you make.  This is also known as living within your means, but that is not all.  To help you get started with a savings plan that can contribute towards a future of homeownership, follow these guidelines.

Before you even get started, make sure you have these two things:

• A safety net is important.  This means that you have three to six months of monthly expense saved up in case something goes wrong.  If you do not have this saved up, you can’t afford a down payment and need to get cracking on building up a safety net.
• You need to have a credit score that is above 620, anything below this and lenders won’t even consider loaning to you.  A conventional loan usually requires a credit score of at least 740.  If you are any lower than 620, explore ways to improve it.

Once you have those things sorted out, you are ready to begin building a homeowners fund.  Like all other forms of savings plans, you need to cut back wherever you can.

• Start by trying to reduce monthly bills wherever you can.  Things like car insurance and health insurance can often be renegotiated every six months, you just have to know what kinds of questions to ask.  If you drive less, or have added safety features to your car, that is a guaranteed bit of a discount.  A little money here and there can really stack up when you are trying to save.
• Drive less to save on gas.  Not only will driving less reduce insurance costs, but it will reduce fuel costs as well.
• Downsize your rental space if you can.  If it makes sense to move into a smaller apartment, or to move to a cheaper neighborhood, then do so.  Whatever you cut out of rent every month can be put directly into your homeowners fund.
• Limit the amount of times that you dine out each week and eat at home more.  Find ways to bargain shop for groceries by buying in bulk and using coupons.
• Set up an automatic savings plan that deducts a certain amount of your paycheck each month and learn to live off what is left.  Force the savings into your budget, chances are that you can be spending less than you realize.

Once you have nailed down a few ways to save money each month, you are well prepared to begin saving for that down payment.  The earlier you start the better, and whatever you can put away will help out in the end.  When it comes time to make the down payment, the closer you are to 10% of the total cost, the more power you will have with the lenders.  It is never too early to start saving for your dream home.

About the author: Jenni Sunde is a freelance fashion writer and pop culture junkie. Jenni specializes in all things lifestyle-related. From home and design to health and beauty. With her love of art and all things beautiful, she delights in sharing her sense of style from her life to your computer monitor. Her title pegs her as an editor at a website that specializes in providing people with a quick car insurance quote, but her passion leads her into writing with a little more substance and a lot more heart.