Anyone who is looking to purchase a home is going to have to consider putting money aside for a down payment. If you are fortunate to own your current home, then you may have enough equity in it to put towards the next house. However, if you happen to be a first time buyer then you will need to do some budgeting.
Rents today are expensive and many people have student loans and other debts that can make saving for a home a challenge. However, don’t worry as there are many ways that can help you save. Here are a few tips:
Limit Spending – This may be the most obvious and easy way to start saving. Look for areas in your life that you can start to cut back on. Perhaps you could limit the number of coffees you purchase each week, or maybe you don’t need the cable TV subscription you have. Calculate the places that you could be saving and add that into your savings account instead. You may be surprised how much things could add up!
Round-off App – Certain apps like Acorns and Clarity Money will round off your transactions and either invest your money or put it into your savings account. Essentially every transaction you make is rounded off to the nearest dollar. Select banks also offer this so check with yours.
Automatic Deposits – Set up automatic deposits into your own savings account. Schedule them to occur right after you get paid so that you know you will have the cash available. If you cannot automate this with your bank then set a calendar reminder every two weeks to make a deposit yourself. Select an amount that you can afford that will not interfere with your regular expenses but will accumulate into a sizable savings within your time frame.
Sell Your Unwanted Items – Do some “spring cleaning” and look around at your belongings in and outside of your closets. What items could you sell that you really don’t need? Other from Craigslist, there are some other apps like Letgo or Offerup that make selling your things very easy. Before you know it the $20 here and $50 there can really add up.
In the end don’t get discouraged thinking you need to have 20% to put down on your new home. There are many different programs offered by lenders where you can put down as little as 3% as your down payment. If you have any questions about the process, contact me today and I would be happy to help!