Saving for a Downpayment seems like a lot of hard work, but these top tips outline some simple ways you can save money for your Dream Home.
- Create a Monthly Budget
All financial goals begin with a monthly budget. Be honest and realistic about your spending habits from the very beginning and stick with your plan. Pay yourself first each month with an automated transfer to savings, and then use systems like electronic bill pay to make sure bills are paid on time. Consider using cash for food and incidentals to keep yourself in line.
- Quarantine Your Savings
One of the biggest challenges of accumulating money is ‘breaking the piggy bank.’ Take steps to keep your savings at an arm’s length. The simplest way to do so is to setup limitations with your bank on the number of possible withdrawals from savings each month or year.
- Make Savings Automatic
Another way to make savings consistent is to make payroll arrangements with your employer. If possible, have a portion of your paycheck each pay period sent to your savings account by direct deposit.
- Save 100% of Any Windfalls
Income tax refunds, year-end bonuses, etc. can be great opportunities for unexpected cash. While it’s tempting to splurge and buy clothes, a car, or a big vacation, those funds are better off in your down payment savings account.
- Save in Big Chunks
While it’s possible to save by skipping that occasional latte, or eating out a little less, your savings will build-up faster if you can save in bigger increments. Consider skipping the big vacation or keeping an older car to save hundreds each month or thousands quickly.
- Downsize Before You Upsize
Consider the large monthly savings possible if you move from a larger home or apartment temporarily into a smaller home. By saving a few hundred dollars each month, you will accumulate a large amount over the course of six to twelve months.
- Work More
Temporarily. Consider taking on a second job for a short period of time. This could be in retail, food service, or possibly performing odd jobs for others.
- Get Rid of ‘Stuff’
One of the biggest expenses in some budgets is storage. If you have rented storage units, stop. NOW ! There are two big opportunities: Sell your items
online for quick cash, AND end the monthly expense.
- Get Accountability
Reach out to someone who cares about you and has permission from you to set you straight if needed. Make a deal and agree that they will check in with you by reviewing your savings account balance each month. This could be a friend, relative, co-worker or even your REALTOR or lender.
Aggressively saving money is a habit that is easy to pick up but a challenge to maintain. Encourage yourself to stick to your goal by keeping your eye on the prize and remembering that you are one step closer to purchasing your Dream Home!
What are some things that have helped you save money in the past? Do you have any ‘top tips’ of your own? Comment below to share your wisdom with others!