There are steps involved in making your dream home a reality. Although making a dream home is a herculean task, with right steps and positive approach you too can achieve your goal of the dream home in the specified time limit. The following steps are involved in the chronological order in planning your dream home.
1) Decide the location & know the land rates
The first step is to decide where you want to live on this earth. It is obvious that one tries to live where one can enjoy all the amenities nearby like a hospital, school, markets, parks, sun facing and the facility of connectivity through the land, rail and air. But again the more you are close to the amenities and the facilities, higher are the land rates. Remember, the land rate is directly proportional to the amount of the amenities around that area. Therefore, it is advised to optimize your decision by searching at least 3 locations and knowing the rates. By comparing each location’s rate and amenities with other, you will be able to take a more justified decision, enabling you to choose that location which is reasonably priced and offering all those basic facilities which are needed to lead a comfortable life. Make a chart of different locations, their rates and amenities they provide as follows:
This will make your work easy.
2) Determine the time horizon
After shortlisting the location and knowing the land rates, it is time set the time horizon in which you want your dream home a reality. It is something which you need to decide very wisely, neither too short nor too long. The chosen time horizon is able to provide the compounding effect to your savings and the investment so that you can maximum money value at the time of maturity.
After all, you are building a home to enjoy it to the maximum. A time horizon of say 10 years is quite realistic and acceptable. Try hard to save every penny and invest to build your dream home. The early you start saving and planning for your dream home, the more you will be able to enjoy its benefits for life.
3) Determine your capacity
The next step is quite important as it is going to let you know your capacity in terms of money at the time of buying the home. This step will determine the value and the area of the dream home which you could afford at the end of the prescribed time horizon. After knowing the value of this step, you will stretch yourself a bit more every year to save more, increasing your buying capacity. This step involves the following sub-steps:
4) Know the area of land you can afford
Your total savings plus the loan amount sanctioned by the bank divided by the land rate of your preferred location at that time will make the size of the dream home which you can afford for your family. Try to keep your home furnishing budget as minimum as possible because you can always buy appliances and furnish your home later in pieces but not your dream home.
Well, the above steps are mandatory before planning your dream home.
I am writing the few other important steps which will support your dream home planning by increasing your savings, will help in reducing the expenditure and provide the suitable cover for any unexpected event which could otherwise affect dream home planning:
5) Minimize your spending
It is common saying that the money saved is money earned. We generally look for the new ways to generate and increase our income which sometimes become quite difficult. We should also look into our existing ways and try to change those habits and practices which are resulting in irrelevant expenses. This method is not only easy but can be applied instantly. I am writing down a few practices which we can be adapted easily:
6) Increase your savings
The money kept in your saving account will give you minuscule return (4% - 5%) which is not even capable of beating the present inflation rate (6.5%). It means, with time the purchasing power of your money will keep reducing. You have to find the ways to invest your saved money in those assets and financial instruments which are capable of beating the inflation and offer attractive returns to realize your dream in time. The following are the few ways which one can adopt (with due diligence) to increase the return on investment:
7) Take the right and adequate insurance cover
You are working hard on realizing your dream. But suddenly something unexpected happens to the health which needs hospitalization, surgery, and treatment. It would be a very costly affair, making you shelling out lakhs of money in few days, shattering your dream of having a home in time. In order to avoid such situation, one should have a proper and adequate health insurance coverage for all the family members.
The above are the important steps which you must adopt and follow while realizing your dream of having the dream home in the prescribed time horizon.
Building a dream home is a goal and you must visualize it every day and decorate in your mind. The mind is very strong; it makes the things real if it sees it every moment. This visualization will motivate you to keep working towards for your dream home.
My mini-dream home planner spreadsheet:
I have made a small but very effective Home planner spreadsheet which helps in quantifying your dream in the form of numbers over the spreadsheet by quantifying your dream. This quantification will enable you to know the amount of money you need to save every day. My spread sheet has the following features: