How to Painlessly Save for a Down Payment
Saving up to buy your own home may seem like an insurmountable task but it doesn’t have to be! Some homes only require 3-5% down, depending on the type of loan.
Working towards any goal you have will require sacrifices, but not as many as you may think. If you have a solid plan and stick to it, saving up for a down payment may be easier than you think.
Here are a few helpful tips to help you start saving for a down payment today!
Create a Savings Account
Creating a separate account will help you allocate funds for your goal of a down payment. Saving in your regular savings account may make it complicated if you have other things to save for. You also don’t want your down payment to drain your life savings (in case of an unforeseen expense).
Start a Budget
If you want to save for something you should know what exactly you are spending. Create a budget with all your incomes and expenses and see where you can cut costs. While you’re saving for a down payment you should still be putting money towards regular savings too, so it is important to differentiate between the two. Figure out just how much you can put towards a down payment every month after you see how much money you will have left over and go from there. Even if it is not much, it is still better than nothing!
Sometimes getting in the habit of setting aside money can be difficult which is why it is a good idea to automate your finances. You can set your bank accounts to automatically deposit X amount of money per week, or whatever timeline you choose, to your savings. This way you won’t have to actively think to put your money aside but you are still on your way to saving big for your down payment!
Cancel unused subscriptions
We all subscribe to multiple services, but do we actually use them all? The answer to that is most likely no. If there’s a magazine you don’t actively read or a subscription box service, you can part with you should! That way you can take the money you’d normally put towards those services and automatically put it towards your savings for a down payment. You’ve been living without it, so you still can!
Bring Not Buy
Do you buy coffee every morning? Lunch every day? It may save you time but definitely does not save your wallet. Try cutting back by buying these things once or twice a week, or alternating coffee and lunch. Making these small changes can lead up to big savings! If you spend $5 every day on coffee and $10 every day on lunch, that’s $420 per month! Cutting back will go a long way in saving for a down payment.
Have more ideas on how to save? Need help saving for your down payment? Call us today or leave a comment below!