HOW TO SAVE FOR DOWN PAYMENT WHILE RENTING

Renting may be a more affordable option than home ownership according to a Harris Poll survey. 70 %  of millenials, 73 % of baby boomers and 61 % of Gen-Xers believe that renting is the more affordable option. But no one will deny that home ownership offers a sense of freedom that renting cannot provide.
Increasing cost of renting may also turn the tide in favor of owning in a few years. 36% of renters however agree that they choose to rent because they cannot afford the down payment on a new home. But 52% of single family renters plan to buy a home in the next three years.
As a renter, it is important to save enough money towards buying a home, especially towards a considerable down payment. Putting a significant down payment on a home means that you get a good mortgage rate. So how do you save for down payment as a renter? Here are four tips:
1. Downsize your current rental property
You can save hundreds of dollars in monthly rents by downsizing your rental. For example, as a millenial, you can downgrade to a studio apartment to save money. Downsizing your property also means that you pay less in maintenance costs.
2. Income on the side
Because of the technology in today's modern world of mobile internet and smart phones, it is easier than it has ever been to make some money from extra work. If you own a car, then you have a huge advantage and can jump directly into the job with opportunities like Uber and Lyft.
3. Set a goal
Knowing how much you can afford to spend on a property is essential to help you identify how much you'll need to save for a down payment. After working out how much you need to save, you must compile a detailed savings plan to reach your target. Having a target goal to achieve will help you buckle down and start putting money away. You'll struggle to save if you try to set aside an unknown amount of money for a down payment.
4. Have a Budget
Draw out ways to save extra cash throughout the month. Jot down a set of your fixed monthly expenses, such as rent, cable and other expenditures that stay the same each month. Then make a list of your variable expenses. They are the expenses which could change each month. Examples include bills like gas and electric as well as groceries or medical bills.
Determine the average amount you spend on these changing costs. Then work out how much income you receive after taxes. The difference between your costs and earnings is your disposable income. Out of this amount, you can regulate how much it is possible to save each month. Allow a small cushion for extras such as a dinner or two out or possibly a couple movie rentals and other incidentals. Then sock the rest away.