7 Tips To Downsize Your Budget If You Plan To Buy a Home in 2025

If you plan to buy a home in 2025, you will want to make sure that you are financially prepared for the purchase. Buying a new home can come with extraordinary expenses beyond the sale price. In addition to closing costs, you will want to budget for property tax, homeowners insurance and upkeep.

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Here are seven tips to downsize your budget if you plan to buy a home next year .

Cut the Cord

A big cost saver for many potential homebuyers is cutting the cord. As reported by U.S. News & World Report, the average monthly cable package is $217.42. Getting rid of cable can save you over $2,600 per year. Streaming has become increasingly more popular as people flock to lower prices and more personalized services. Statista shows that the average combined cost of streaming services was $54 per month, significantly less than the over $200 people spend on cable.

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Reduce Your Scubscriptions

If you do opt for streaming services, it is important to keep track of what you are spending. Subscriptions can add up quickly. According to CNBC, many people underestimate the amount they spend on streaming and other services. Over half of the respondents believed they spent $100 or more less than they actually spent. To avoid overspending, it is recommended that you regularly check your accounts to ensure that you are not paying for a subscription you do not use.

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Dine Out Less

Another way to save a substantial amount of money is by dining out less. As GOBankingRates previously reported , the average American spends approximately $166 per month eating out. For a couple, this means that nearly $4,000 a year is spent on dining at a restaurant. By choosing to make your meals, you can stash significant cash to help with your down payment. If you do not want to completely give up on dining out, you can consider taking advantage of restaurant offers like Early Bird Specials, rewards programs and deals from discount retailers.

Choose Your Groceries Carefully

While eating out can be exceptionally expensive, dining in can also break the bank. While you might be saving on service costs, you could be overpaying for groceries. Certain stores are pricier than others, so it is important to shop around to find the best deals. You can also cut costs by buying in bulk and using coupons.

Rethink the Way You Travel

When you are planning to buy a home, spending a lot of money on a vacation is probably not the best idea. Instead of flying abroad, consider doing a staycation or buying a day pass for a local hotel. The New York Times noted that the average cost of a luxury hotel is $381 per night, while day passes start at $25 and are generally $65 or under.

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Limit Your Unnecessary Expenses

When downsizing your budget you will want to list every expense that you have each month. Then you can place each expense into a necessary or discretionary category. Necessary expenses should be limited to those that you need to live, such as food, shelter, transportation and utilities. Discretionary expenses are those that may be unnecessary. They are wants vs. needs. When you are trying to save money, you will want to limit your spending on wants such as entertainment, subscriptions and apparel.

Find the Right Insurance

Finally, you can reduce your spending by shopping around for more affordable insurance. Many people do not realize they are overpaying for insurance they may not need. Comparing rates can help to ensure you do not pay more for home, auto or life insurance than you need to. According to The Zebra, the discrepancy between the average six-month premium of the most expensive and least expensive insurance companies is over $500. A quick comparison could save you hundreds.

This article originally appeared on GOBankingRates.com : 7 Tips To Downsize Your Budget If You Plan To Buy a Home in 2025