12 Tips to Save for Your Home's Down Payment
Posted by Eric Skates on
When first beginning to save a down payment for a home it can seem overwhelming. Obviously, the more you can save, the better, but how can you come up with several thousand without saving for half a decade?
There are many ways you can help to boost your savings in a relatively short period. Below are twelve tips you can utilize to get started:
1: Set a schedule for savings from your weekly paychecks. The best way to do this if you are just starting out is to begin small and work your way up. Start small and work your way up. Begin with $5 or $10 and gradually work your way up to higher amounts. This way the money will not be missed.
2: Cut unnecessary recurring bills from your budget and put the money saved away for your down payment. A few ideas of expenses you could cut include: cable television, movie streaming services, magazine subscriptions, physical newspapers, meal deliveries, any box subscriptions, etc.
3: Fill a coffee can up with your loose change. When it's full, cash it in and deposit the money into your savings account. Change is both easy to forget about and adds up much quicker than you think.
4: Take on a part-time job just one or two days a week. With even just one day you could potentially generate an extra $60 to $100 weekly for your down payment. This could add up to as much as $5,200 extra in a single year.
5: Do not get discouraged and remember every penny counts. When people are confident they tend towards better saving habits versus those who have become discouraged or given up. Remember that saving for a mortgage is a long-term commitment. It is not going to happen overnight.
6: Consider freelancing from home and saving this money. There are many different jobs you can do and nearly all of them can be done whenever you have free time. This is great for busy individuals who simply do not have the time in their schedules for a second job.
7: Pay off your credit cards so those funds are available for when the time comes. No credit cards? Consider applying for one as this will also help build your credit score.
8: Pay off any large purchases or debts which add to your monthly expenses. Examples include car loans, student loans, or previous mortgages if applicable.
9: Consider downsizing your current living arrangements for the short term, if possible. For example, a family of four with two children of the same gender could temporarily downgrade from a three bedroom to a two bedroom for a year. This could potentially save anywhere between $100 and $400 every month - all of which can be placed into savings.
10: Sell your unwanted items online or in a yard sale. You would be surprised at just how much you can make in a weekend selling junk you no longer use.
11: Consider crowdfunding. This works especially well if you have a unique, interesting, or emotional story to tell. Be sure to share on social media so your family, friends, and coworkers can contribute.
12: Ask your boss for a raise if you have been in your current position for long enough.
If you utilize these twelve steps you can significantly cut down on the time needed to save your down payment. Not only this, but you will successfully save a larger down payment through your hard work. This is important as the higher your down payment, generally the lower your monthly mortgage payments will be.
For more information on purchasing a home contact us today.