Ways to Save for a Home Down Payment
Saving up for a home down payment can seem like a daunting task. You will need to save several thousand dollars to have a substantial amount for closing costs and a down payment. Use these strategies below to saw up a large amount of money- quickly.
Tips to Save for a Home Down Payment:
Set a goal
First off set up a goal of how much you want to save and in what timeframe. Make your goal specific but attainable. This goal can help keep you motivated and steer clear of impulse buys.
Use a budget tracking app
There are many different ways to track your budget. This will allow you to stay on top of your money and not spend frivolously.
Set up a separate savings account
Set up a savings account that is specifically for your home down payment. Try to find a higher yield savings account such as a money market. Make it somewhat difficult to access so life’s emergencies don’t tempt you to take money from this account.
Earn secondary income
Look into some ways to earn a secondary income. Earning some extra money is a great way to set aside for a home down payment. From pet sitting to freelancing, the opportunities are endless. Try to devote an extra 10-15 hours per month on earning a supplemental income. Aim for couple extra hundred dollars each month to put aside for your down payment.
Adjust your tax withholdings so that you don’t have a refund at the end of the year. Put any different on your paycheck straight into savings.
Automatic Savings Allotments
Set up an allotment from your paycheck to go directly into savings. If it automatically goes in a separate savings account you won’t have the temptation of spending it.
Downsize/ have a roommate
The best way to save money fast is to but down on your largest expense, your household expenses. Consider renting a small studio apartment or getting a roommate to offset this cost. Save the difference between what your rent is and what your mortgage would be. This way you know you’ll be able to comfortably once you have a mortgage.
Live with no car or only one car
Another large expense is transportation. The amount of money that it takes to maintain and insure a vehicle is astronomical. Try to utilize public transportation or find other means of getting around. This sacrifice you can save upwards of $500 monthly by removing the expense of maintaining and insuring a vehicle.
There are still ways to enjoy television programs through Netflix or Hulu Plus for a fraction of the cost. This can save you $100 or more per month, a large amount to contribute to your down payment savings.
Get rid of your home phone
In the same regard as cutting cable, many people can find it redundant to have both a home and cell phone. Get rid of that extra $50 expense per month and sink it into a high yield savings plan.
Get better insurance rates
You can shop around to see where the best rates are, or if you like the service of your current insurance carrier, call to get your policy discounted. Many insurers will offer promotions to keep a customer that is in good standing.
Give up expensive luxuries
Sure it’s nice to pay someone to manage your landscaping or come and clean your home every 2 weeks, but consider the savings from doing these things yourself for even just a few months.
Give Up the Expensive Gym Membership
There are many ways to workout without paying for a gym membership. Check out the various free exercise videos that are available online. When the weather is warmer make an effort to exercise outside.
Cut back on your grocery bill
Use coupons, buy in bulk, shop the sales & ditch the bottled water. A bunch of small changes can shave a lot off your bill each month.
Fill Up Your Tires
You car runs with better gas efficiency when the tires are properly inflatable. Pass this savings at the pump along to your down payment savings account.
Time Your Errands
Be aware of how much driving around you are doing. Try to schedule your errands around what is closest to each other to save on gas.
There are many ways to save up for a home down payment. You do not need to do all of these things, but the more you cut back the sooner you can be in your dream home. What sacrifices are you willing to make to save some money for a home down payment?