Saving money for a down payment on a home can seem like a daunting task – especially if you’re a first-time homebuyer. While we’ve all saved money for big purchases like cars and vacations, saving for a home is a different ball game. While it may seem out of reach, it’s more attainable than you may realize. If you’re hoping to buy a home soon, then follow these tips for saving money for your down payment.
Adjust your expenses
First of all, now is the time to take a hard look at your monthly expenses. If you have a habit of dining out most days of the week, then consider making more meals at home. Do you like to splurge on coffee on the way to work? Make it yourself instead. Other places you may want to cut back include streaming services, nights out with friends, and travel plans. You don’t have to cut back forever. But reigning in your spending for a few months can add up.
Automate your savings
It’s easier than ever to automate your life, and that includes putting money into a savings account. Check to see if your bank offers automated saving programs. This relieves you of having to think about it every month, and soon you’ll see your savings grow without any extra effort on your part.
Get an extra gig
The gig economy is stronger than ever. You can use that to your advantage while you’re saving for a down payment. If you want to fast-track your savings, then consider getting a side hustle such as driving for a ride-sharing company, delivering food, or selling your handmade crafts online.
Ask for a raise
Don’t leave money sitting on the table at your current job, either. If the time is right, then ask for a raise at work. When you do get the raise, have the extra money diverted to a savings account.
Pay down high-interest debt
High-interest debt like credit cards can make it challenging to save money. When you’re paying so much extra money each month in interest, it can feel like you’ll never reach your savings goal. That’s why you should consider paying down high-interest debt. You can also try refinancing current debt so you pay a lower interest rate.
Save your tax refund
Are you expecting a tax refund this year? Then earmark that money for your down payment so you won’t be tempted to spend it elsewhere. Your savings can see a huge boost this way, and it can inspire you to double down on your efforts.
Sell unwanted items
When was the last time you decluttered your living space? Chances are you have unwanted items that are just sitting around your home. Turn them into cash by having a yard sale or selling your items online. Having fewer things will also make it easier to move once you do buy a house!
Look into all your options
Finally, be aware of all the options that are available to you as a homebuyer. Many down payment assistance programs are available to help first-time homebuyers. You should also shop around for a mortgage. While conventional mortgages often require a down payment of at least 20 percent, loans backed by the federal government often require a down payment of as little as three percent. Some even require no down payment at all!
