Saving for a Down Payment

There is so much to be said about owning your own home, top on the list the financial benefits and next the sense of pride that comes along with homeownership.  In spite of the debacle of the subprime mortgage fall out, many Americans still desire a home of their own.  It is just seems to be synonymous with raising a family.

Today with interest rates being historically low and the decrease in housing prices, it is a great time to buy.  However, what is challenging for many hopeful buyers is saving the down payment. A 20% down payment has been discussed a lot since the housing bust, but that is unrealistic for most buyers.  If you wanted to purchase a house for $200,000, 20% would be $40,000, an unlikely amount for most buyers, especially the first time home buyer.

The best way to start saving is to sit down and review your budget (if you don’t have one, this is a good time to start one.) Look for all those areas you can make a change or cut back, and put that money aside.  You would be surprised how quickly the money will add up. 

Set up automatic savings have 5%-10% of your paycheck automatically transferred to a savings account.  You never see this money in your account, so you can’t spend it.

Coupons   when reviewing your food budget plan your menus around the items that are on sale, clip and use coupons, aggressively.  Don’t be afraid to ask you grocer to match prices. You will be surprised how much it will save you.

Lunch do you go out to lunch every day and spend at least $10.00? Imagine that is $50.00 per week, $200 a month, $2400 a year.  $2400 added to your other savings!!!!

Coffee perhaps that coffee habit of $5.00 a day, you could kick. $5.00 a day times 5=$25.00 a week, $100 a month, $1200 a year. (We won’t count Saturday and Sunday, everyone deserves a little fun)

Amenities downgrade some of your amenities: do you really need 5-6 movie channels, many sport channels, how about your gym membership.

Utility Bills many electronics in the home do not need to be plugged in continuously.  Why leave the microwave or toaster oven plugged in all day while you are at work, unplug chargers when not in use, and turn off lights when you are not in a room.  Don’t turn the water on and walk away; don’t leave the water running when you brush your teeth. You will see the difference in your utility bills.

Unused Stuff how about those items you bought and used once, or never used.  Go through your stuff and sell those items.

Special Skills do you have a special skill, why not market your skill and services to make extra money.

Employer work overtime when possible

Bridal Registry you can set up a bank account for your monetary wedding gifts

Saving for a down payment will seem challenging at first, but continued financial discipline will put you on track for obtaining your goal.