Buying a house is a big step, and it requires some careful planning. Here are three key banking habits that can help you prepare to become a homeowner:

1. Create a Budget and Stick to It

Budgeting might sound intimidating, but it’s really just about making a plan for how to spend your money. Break it down into three simple categories: needs, wants, and savings. Understanding where your money goes is the first step toward financial readiness for a home.

2. Start Saving

As a homeowner, having an emergency fund is essential. A good rule of thumb is to save 1% of the home’s purchase price. So if you’re thinking about buying a $400,000 home, aim to set aside $4,000. Don’t worry, this doesn’t mean you’ll need to spend that money right away—it’s just a cushion for unexpected expenses down the road.

3. Watch Your Credit Score

Your credit score plays a big role in qualifying for a home loan and determining your interest rate. Lenders like to see your credit card balances between 10% and 30% of your credit limit. So, if you tend to carry large balances, now’s the time to pay them down. And here’s a pro tip: don’t wait until you’re house shopping to check your credit. If there are errors on your report or things you need to fix, it could take time. The earlier you start, the better position you’ll be in to snag a great interest rate!