4 Ways to Begin Saving for a Down Payment on a Home
Saving up for a down payment on a home can seem like a never-ending uphill battle. Not only do you have a car payment, living expenses, and rent, but your job isn’t paying you enough to save up! The good news is, there are multiple things you can start doing immediately to begin saving your pennies and have the money soon enough. Given, some of these methods require some sort of sacrifice, but if you keep on top of things, you will find success at one point in time.
Here’s how to prioritize your finances in order to finally save up enough for a down payment on a home:
1. Pay off your current debt
Paying off your debt should be the first strategy you put together. Not only will this make your income to debt ratio appear better for lenders, but you will be able to manage the money you have coming in better. For example, if you have a small loan or credit card payment, focus on paying that down to at least 25% of the max limit. Once you get that down, you can now save the money you would have to put on that card monthly and start paying off other debt one at a time. Now your credit score will start raising and the opportunities will be endless.
2. Sell your car
It is time to take a look at your car and ask yourself if you really need it. The name of the game here is to lower your monthly bills, and if your car is taking up a huge chunk of your money just to look nice, you might want to consider selling it. If your commute to work is close, and you don’t travel long distances, you can sell your newer car to get an older one. Find one that is economical and has high-resale value. Best part is, once you get an older car and pay it off, you won’t have to worry about payments, your insurance will decrease, and you can sell it for a down payment on a newer vehicle when you need it. It is a major win.
3. Set up automatic savings
Currently, my phone has two main banking apps. These are my actual bank and Qapital. Contact your bank and see if you can set up automatic payments. I am not talking about 25% of every check you have. I am talking about transferring a dollar every time you swipe your card.
This helps you save money without even noticing that you are saving! I also have my other Qapital app transferring the remainder change to the closest dollar off of my purchases to another savings account. You won’t believe how much money you will save without knowing it.
4. Cook at home
One of the easiest and quickest ways we all spend money is on food. Ten dollars per meal at a fast food joint or restaurant seems to be what everyone is willing to spend. But if you look at the bigger picture, $10 each meal, 3 meals a day, 30 days in a month, that is $900 a month spent on food! All because it is a necessity and you wouldn’t think twice about the purchase. Good news is, when you get to buying your own groceries, you will start to notice that $10 per meal start to go to $1-$3 per meal. That ends up being $90-$300 per month and you will be eating healthier.
Hopefully these few tips help put money into perspective for you. It is all about the mindset and winning every battle you can with money. Take your self control to another level and be the captain of your finances, and hire a reputable agent to help you along when you’re ready to begin searching for a home.
– Written by, Sam Casteris is an aspiring writer who
loves writing about all things real estate and travel.
You can check out her work on Contently.
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