Is it possible to save up for an apartment?
There is no definite answer to this question. It would be a lie to say that everyone can save up for a three-ruble note in the center of Moscow. Much depends on the circumstances.
You can relatively quickly raise money for an apartment if you have a large salary, you are provided with cheap or free housing, and you have no dependents. For example, a childless couple of programmers who live in a relative’s apartment and pay only for a communal apartment have a very high chance of success .
If they are relocated to rented housing, the likelihood of saving will still remain. And if school teachers find themselves in the place of programmers, and even with a baby in their arms, the chances will be reduced and the process will slow down significantly.
Read also: How to Save on Electricity as a Family.
Time is another important criterion. In theory, anyone can save up for an apartment. It’s just that some will take five years, while others will take a hundred. And the second option, of course, means “no, you cannot save.”
Let’s say the teachers in the example still manage to save 10 thousand a month. This is 120 thousand a year or 1.2 million in 10 years – provided that nothing changes. If the apartment becomes more expensive, they will have to live in rented housing for many years and dream about their own.
The starting conditions are very important, and saving is not always profitable. No matter how demonized the mortgage, for many it is a good and only tool to buy their home in the next decade.
All this does not mean that you cannot save up for an apartment. Let’s figure out how this can be done.
What to do to save up for an apartment
Set a financial goal
First, you need to understand what kind of apartment you want and where. When you decide, you can see the current offers on the real estate market and at least roughly estimate how much you need to save. Add 10-15% to this figure in case of inflation, crises, and similar shocks, and your financial goal is ready.
Decide on a strategy.
There are two ways of calculating. It is worth using both for clarity – the results will give you material for further analytics.
Calculation of “surplus.”
You figure out how much you have left every month and calculate how long you have to save. For example, you can save 15 thousand rubles monthly. You need two million. Under such conditions, it will take more than 11 years to save.
You determine how much time you are willing to save and calculate how much you need to save each month. Let’s say you want to move in five years and for this, you need all the same 2 million. Then you need to save 33.3 thousand a month.
Accordingly, you can either save longer, without prejudice to anything or make efforts to save more and reduce the time. The resulting figures will also help you come to a convenient option convenient for you – you already have a range of terms and amounts for this.
Deal with a budget
Usually, when it comes to increasing savings, they suggest cutting costs. This is a sane and always good idea, but there is a nuance. In any case, saving up for an apartment will take a long time. Tightening your belts for several years and limiting yourself in everything is quite difficult. Moreover, it is often unnecessary spending that brings more pleasure.
However, it is still worth taking into account the costs, organizing and planning them. Keeping a budget helps to correctly distribute spending in accordance with income so as to avoid financial pockets.
It is not difficult to treat expenses rationally and spend wisely. Let’s say you don’t forbid yourself from going to the bar on Friday night, but you set a spending limit. Or you issue, for example, a bank card with a good cashback so that part of the money spent will be returned to you. It is also useful to track discounts to buy quality goods and save money.
This makes it easier to postpone regularly.
Increase your income
Cutting costs will free you up a little money, but the accumulation process won’t cut much. So focus on increasing your income.
Unfortunately, there are no universal ways to go and make millions right away. Moreover, if you thoughtlessly follow business coaches’ advice and give up everything in the name of a better future, you may be left without an apartment and bread.
There are definitely options to earn more: ask for a raise in salary, change company, take a part-time job, get new skills and grow up the career ladder.
It’s not even about the apartment here. If your income does not change for 5, 10 or 20 years (how much you are going to save), then something you are doing wrong.
If you manage to increase your income, you can save more, overfulfill your plan and save up for an apartment earlier.
Take care of your savings.
The accumulation process will take years, which means leaving money under the mattress is shortsighted. There they will only depreciate due to inflation. Ideally, you need to not only save, but also increase your savings. How to do this depends on when you plan to buy an apartment and how ready you are to deal with investment instruments.
Another simple instrument is bonds. The mechanism is as follows: you lend money to a company or the state, and after a certain time they return the loan amount and interest from it to you. The yield is fixed and is usually higher than on deposits.
In general, if you plan to save for a really long time, almost any type of investment is suitable for you. But it’s important to remember this:
- Invest only in tools you understand.
- High profitability means high risks. Money for an apartment should not be jeopardized.
- Very high and guaranteed returns may indicate fraud.
Find out how to get help from the state.
Some bonuses will bring you closer to your goal.
If you have children, you received medical treatment, studied, donated to charity, made contributions to a non-profit pension fund or invested, the state is ready to return you part of the property tax of individuals. The deduction is easy to issue in your personal account on the FTS website.
Since 2020, in Russia, he is paid for the birth of the first and second child. In total, you can get 616 617 rubles. They are allowed to send them to buy an apartment. Of course, giving birth to children for the sake of improving living conditions is not worth it. But if you have them, then you will have to save a little less.
Young Family Program
The state is ready to pay 30–35% of an apartment’s cost to people under 35 years old. There are many nuances in the program, but this is a good chance f you are the right fit for it,
It is always difficult to save large sums. It seems that you deny yourself a lot, but the epic’s ending is still so far away. And the situation turns out from memes: I saved up for an apartment, but then freaked out – and lowered everything to shawarma.
Also read: How to Choose Dividend Stocks
There is a long way ahead of you, and the hardest part will be not to quit. Therefore, you need motivation, and no one knows better than you what. For some, gamification works when you turn savings into a quest. Someone is passionate, and ha bet will whip him up.
Find your reasons not to get lost and keep going. In the best case, you will get an apartment. At worst, save up some amount of money that won’t be superfluous. So there is no reason not to at least start.
Adapted and translated by Wiki Avenue Staff
Sources: Life hacker