How to save money to buy an apartment

The issue of buying your own home is particularly acute for most residents of Russia. The interest rate on real estate and cash loans is very high, which causes concern even for people with above-average earnings. What to do if the inheritance in the form of an apartment is not planned in the near future, but you want to live in your cozy home? How to save money for an apartment without denying yourself a normal meal and accommodation? Answering all these questions will help proven advice from financial experts and people who managed to raise the necessary amount to purchase real estate.

Learning to plan expenses

Regardless of which option you choose to save for your own home, you need to have initial capital. Now the average apartment in which a young family can live costs about 3 million rubles, and 20-60% of this amount needs to be saved up so that there is a start for the application of serious and effective measures that will help buy a home.

To collect several hundred thousand rubles, you need to optimize your expenses as much as possible and learn how to save money.

This will help the following rules:

• learn how to reasonably save on food, try to cook at home from quality products, and not visit restaurants, this will help save a considerable amount without reducing the standard of living;
• optimize utility costs, install meters, replace ordinary light bulbs with energy-saving ones;
• do not make rash purchases, especially expensive ones, plan all your expenses in detail and weigh their expediency;
• do not take loans and do not lend, try to manage with your own funds;
• set aside at least 10% of each cash receipt, this is called “salary to yourself”, it is issued immediately after financial injections and remains untouchable.

How to manage savings?

If you have learned how to raise money, plan your budget correctly, and without worsening your living conditions, you managed to save up the required percentage of the amount of your future housing, you can be proud of yourself, now the process will go much faster and more interesting. Let's take a conditional amount of 400,000 rubles and try to visually see how you can use it to accumulate capital for your own housing.

This is one of the simplest and most reliable methods of saving for your own housing. You need to take your start-up capital and put it into a deposit account. The interest rate can be different, depending on which structure you choose. Conditionally, you will receive 13% per annum, and every month you will continue to save 20,000 rubles. A year you will receive 52,000 rubles on a deposit, and if you renew the contract and add the accumulated 240,000 to the initial amount, then next year you will already have a profit of 83,200 rubles. If you increase the contribution every year, then the percentage will also increase, therefore, after 4-6 years you will be able to become the owner of your own apartment.

Investing in securities

Investments in Forex, stocks and bonds can give up to 500% profit. However, this event is only suitable for those who know exactly how to play in this market. If you are not confident in your abilities, then it is better to postpone this option and use other proven methods.

Mortgage

Buying an apartment on a mortgage is an excellent option for many young families, since people get housing immediately, and they can pay for it gradually, even over decades. However, banks advertise this service quite “juicy”, in fact, it has several pitfalls that you need to be aware of.

First of all, if you take out a mortgage, the apartment will not become yours, it will be secured by the bank. In case of late repayment of the debt, you may be evicted from your housing without returning all previously made investments.

It is also worth considering that the more time you spend on paying, the greater the interest you will simply have to overpay the bank for giving you the opportunity to use the money of its depositors. The amounts are impressive, sometimes they even reach half the initial cost of housing.

Disadvantages of a mortgage:

• long-term dependence on a financial institution;
• the inability to calculate their financial capabilities for decades to come;
• big overpayment;
• the risk of being evicted from their own housing;
• moral pressure.

Living in rented housing and saving on your own

For many people, the long-term prospect of renting an apartment will seem wasteful, but in some cases it can be an excellent alternative to the same mortgage. If you initially have an amount of 400,000 rubles, you will be able to properly dispose of it in order to buy your own living space in 6-10 years.

If you pay 20,000 rubles for rent every month, then you will have another 20,000 rubles left that you do not have to pay for a mortgage that you still did not take. This amount must be immediately put aside in an envelope, and in a year we will have (20 * 12) 240,000 rubles, add to this amount those 400,000 that did not go to the first installment, and we will get 640,000 rubles. After 2 years, we will have 880,000 rubles at our disposal, and we will already be able to buy a small room, which we will rent out.

Savings for the month will be higher, since approximately 5 thousand more will be added to them for a rented room. After 3 years, you can sell the property you bought the day before, add your savings to the proceeds, and buy a small studio apartment, which is quite enough for a young couple to live. If there are children in the family, it will take several more years to raise money for a two-room apartment.

Risk factors and concerns:

1. Keeping money under the pillow according to the old grandfather method is completely unprofitable, as they depreciate every day. If you decide to save for your own housing using a bank deposit, it is better to do it in a stable foreign currency, this will guarantee your confidence in the stability of your savings.
2. Studying the real estate market and banking services takes at least 1-2 months, you need to be prepared for this. Before you find a reliable method of investing and choose the most suitable conditions for the purchase of housing, it is worthwhile to study in detail all the possible options and offers from developer companies, stock firms.
3. Inflation and devaluation is a constant phenomenon in our country, so you need to be prepared for the fact that the cost of an apartment will increase every year. It is for this reason that, when initially calculating the time that will need to be spent to collect the required amount, you need to add at least a year.
4. Real estate and cash insurance will help you protect your assets and recover your savings in the event of their complete depreciation. It is worth choosing insurance companies with a good reputation that have been on the market for a long time.

How to save up for an apartment with a small salary?

The above methods of raising funds for own housing only work if the person has a stable high income. But what if the salary does not allow you to save 20-40 thousand every month? In this case, financial experts recommend finding a source of income, such as selling valuable property or real estate, in order to obtain the initial capital that is necessary for competent savings.

If there is absolutely nothing that can bring profit, this does not mean that you will have to live in a rented apartment all the time. It will be possible to purchase your living space only for a longer period of time.

To collect start-up capital, you need to set aside 10% from each salary and all sudden profits (winning the lottery, gift, bonus, etc.). An excellent option would be passive income, which can be organized after accumulating a certain amount.

Anyone who has a regular income can save money for an apartment. Proper budget planning and financial allocation will help you collect savings even from a small salary, which in the future will work to make your dream a reality. Treat your assets responsibly, direct them in the right direction, and you will certainly be able to acquire your living space in just a few years!