Wondering how you’ll ever be able to save up for a down payment? Here are a few of the best tips we have to offer.
Tip #1: Start Saving Money in Small Amounts
The thought of saving up 20% of a home’s purchase price as a down payment can feel scary and impossible. After all, 20% of a $200,000 house is a whopping $40,000! That’s not the kind of money most people have just sitting around.
The key is to start by saving small amounts. For example, do you go out to lunch every day of the week? Let’s say you do, so you’re spending about $40 a week. Do you think you can change your lifestyle a bit so you only go out on Fridays? That means you’re saving an extra $32 per week now.
Over the course of a year, that’s over $1,500 in your pocket! And that’s just one lifestyle change. We’re sure you can find more as you start looking for them.
Tip #2: Have Money Sent into Savings from Your Paycheck
Most employers offer the ability to have some of your check sent straight into your savings. That’s great, because it means you’ll be less tempted to spend it. You can’t spend what’s not in your checking account, right?
This also gives another benefit. By making your savings automatic, you don’t have to remind yourself to transfer the money. You can free up some space in your mind, knowing that you are regularly putting money away towards buying your dream home.
Tip #3: Sell Stuff You Don’t Want Anymore
Most of us have stuff we don’t really care about anymore. That old video game console and the 30 games you’d accumulated for it. That bedroom set that was great when your kids were at home, but now they’re done with college and living on their own.
If you have stuff laying around the house that may be worth something, consider selling it online. Facebook Marketplace, eBay, Craiglist – all of these places make it easy to sell your stuff for extra cash.
Plus, having less stuff when you buy your dream home means you have fewer things you need to move!
Tip #4: Start a Side Hustle
Everyone has skills they can turn into extra money.
- Mow grass
- Snow blowing
- Freelance writing
- Selling crafts on Etsy
- Tutoring kids
- Teaching English to non-native speakers
- Family photography
- Car detailing
- Driving for DoorDash, Uber, etc.
Spending a few hours a week can earn extra money to put towards your down payment. Who knows – maybe it will even grow into a business that replaces your day job!
Tip #5: Lower Your Utility Bills
Do you have the fastest internet service your provider offers? Or maybe you’re paying for a TV + Internet + Phone bundle, but don’t even use the phone number or watch much TV?
Perhaps you have some inefficient appliances in your house that are using more water or electricity than is necessary.
These types of things are bills you can lower. Cancel your cable TV service and use a streaming provider for a much lower cost. Invest in efficient appliances that will save money over time.
The savings may seem small, but every little bit helps.
Which of these tips to save money for a down payment resonates the most with you? Do you have any questions about the home buying process, or how much home you can afford? Give us a call at 949-392-6400!