Purchasing a home is a big financial responsibility, but the rewards of homeownership are many. Particularly for first-time homebuyers, coming up with the down payment needed to see your dream to fruition can often seem overwhelming. There are many strategies, however, that can help you save for your down payment.
It should also be noted that various loan programs exist that would allow you to drastically reduce the amount of money needed for a down payment. For example, VA loans often require 0% down, while FHA loans see down payment options ranging from 3-6%.
When you're ready to start saving for your down payment, consider these smart solutions:
#1: Cut Back
When you realize that cutting back on certain things can help you reach your goals, it will change your perspective. Think of it as an investment rather than a loss. Here are some areas where you can potentially cut back:
- Morning coffee and stops in the car for water, drinks and snacks ... carry your own
- Cable and expensive internet … use some of the cheaper options such as Netflix
- Eating out ... cook at home and use leftovers for quick meals and lunches
#2: Do it Yourself
You can save on a number of the services you pay for each month by doing it yourself. While there is a time and place for professional assistance, consider these alternatives:
- Personal grooming ... paint your own nails, give yourself a facial, use coupons for haircuts
- House maintenance ... mow your own yard, trim the trees, clean the interior, repair what you can
- Make presents for family and friends instead of buying, especially cards and gift wrap
#3: Let Your Goals Be Known
You'd be surprised how much support you will receive from your circle of friends and family. They may opt for a game night-in instead of an expensive concert or dinner. They will also be more understanding if you can't chip in for a trip or group present. What's more, when you make your goals known to your friends and family, you're more likely to stick to them!
#4: Take on Extra Work
This may sound obvious, but it's more than just overtime or a sales commission. Try to turn your hobbies and extra time into money. Look on community boards for services wanted such as tutoring, cleaning, dog walking, errand running and even elderly companionship and driving.
#5: Save on Purchases
Take the time to research costs and shop during sales. It may take a couple extra minutes each week while grocery shopping or clothes shopping, but the end results will be worth the effort. Become a bargain hunter and you'll quickly see the savings stack up.
Make Your Homeownership Dreams Come True
Making the conscious decision to save will be the best start to achieving your down payment goals. Create a monthly alert on your phone or computer that lets you know when you've reached the monthly amount. Once you've reached the desired down payment amount, talk to a real estate professional to start looking at homes that could be yours.
Meanwhile, give us a call and we can help put you on track with a savings program, and maybe show you ways you can save on taxes.