Saving for a down payment on a house is hard work. The bigger the down payment, the better for the homebuyer. That’s why it’s great to have as many creative ways to save as possible. Here are 5 ways to save money for a down payment.
Saving Tips for a Down Payment
It may seem like you will never reach that big down payment goal. With a little hard work and some sacrifice, you will get there! Making some modifications in your spending and lifestyle can make a huge difference. Downsizing, cutting back, and generating more income are three strategies that can help round up extra dollars in your savings account.
Downsize as much as possible
Life can get very comfortable with the latest luxuries. However, less money spent equals more money saved for a down payment. There are all sorts of ways you can downsize. Consider the following items to downsize to start saving money for your financial goal:
- Trade in your car for a cheaper model.
- Rent a cheaper house or apartment.
- Downgrade electronic needs like phone plans with data. Stick to Wi-fi or basic phones.
Maybe you have a great deal on your phone or your car is paid off. Evaluate your own situation and do research before jumping into any of these major shifts in your life.
Give up some perks to save money
Saving for a big goal can be difficult, but it won’t last forever. Remind yourself of this every day when you are living without some of your favorite things or wishing you were still making those exciting travel plans.
- Cut the cable. You can downgrade your plan, but why not just save the entire bill?!
- Get rid of any other entertainment subscriptions and hit up the library.
- Skip any vacations you were planning.
- Put your gym membership on hold (or cancel it all together), and learn some home workout routines. You can get inexpensive instructional DVDs, or look some up online.
- Make your own coffee and tasty treats at home.
- For gift-giving occasions, let your family know you need cash instead of presents. Try and phrase it in a nice way. Maybe with a cute card?
Generate more income
Finally, what better way to save more money than by making more money.
- Sell items online or at a yard sale. A tried and true method.
- Work another job or pick up some odd jobs from friends for some quick cash.
- Work more hours at your current job.
- Get rid of your debt so that money can go towards the down payment. This is more of a shift of income.
Saving for a house, new car, wedding, or another major life expense can be very challenging. The more you sacrifice, the quicker you will reach your goal. You may surprise yourself with how much you can do without. Or you may very well throw a party when it’s all over. Either way, start saving today!
For more tips on saving, read through ACCC’s How to Build Savings By Cutting Back.