Anyone who is in the market to buy their next home is going to have to consider putting money aside for a down payment. If you are lucky enough to own your current home, then you may have enough equity in it to roll into the next house. However, if you are a first time buyer then you will need to begin doing some budgeting.
Rents today are more expensive and many still have student loans and other debts that can make saving for a home quite a challenge. However, don’t panic as there are many ways that can help you save. Here are a few great tips:
Limit Your Spending – This may be the most obvious and easy way to begin saving, but look for places in your life that you can cut back. Maybe you can limit the number of coffees you get each week, or maybe you don’t need the cable TV subscription you have. Calculate the various places you could be saving and put that into your savings account instead. You will be surprised how much things add up!
Round-off App – Some mobile apps like Acorns and Clarity Money will round off your transactions and either invest your money or conveniently add it into a your savings account. Essentially every transaction that you make is rounded off to the nearest dollar. Check with your bank too as some offer this.
Automatic Deposits – Set up automatic deposits into your savings account and schedule them right after you get paid so you know you the cash is available. If you cannot automate this in your bank, set a calendar reminder every two weeks to make a deposit manually. Select an amount that you can afford that will not interfere with your bills but will accumulate into a healthy amount within your time frame.
Sell Unwanted Items – Do some “spring cleaning” and look around at your belongings in and outside of your closets. What things could you sell? Other than Craigslist, there are other apps these days like Letgo or Offerup that make selling your things very easy. The $20 here and $50 there can really add up.
Finally, don’t get discouraged thinking you need 20% to put down. The reality is there are many different programs offered by lenders where you can sometimes just put down as little as 3% as your down payment. If you have any questions, contact us today and we would be happy to assist you.