For many first-time homebuyers, the thought of saving enough money for a down payment is very overwhelming. However, if you follow a few simple strategies and don’t get discouraged, saving for a home is more attainable than you might think. Here are five tips you can use to help you hit your down payment target.
Get a Side Hustle
With the gig economy continuing to grow larger, there are many opportunities to boost your down payment savings with a lucrative side hustle. Consider spending a few hours a week delivering meals or groceries for an online delivery service, walking dogs, pet sitting, or driving for a rideshare service. You could also consider working on a freelance basis if you’re skilled as an artist, photographer, or writer.
Reevaluate Monthly Expenses
Take some time to go over your monthly expenses and try to find ways to reduce unnecessary spending. If you frequently eat takeout or fast food, consider cooking more meals at home to save money. If you subscribe to an expensive cable package, think about cutting the cord or subscribing to a cheaper streaming service. You can also cut back on purchases by avoiding impulse buying online and in person.
Get Your Debt Under Control
Saving money for a home is difficult when you have a lot of debt since most of your income goes toward making monthly payments. Carrying a lot of debt can also make it difficult to qualify for a mortgage, and you’ll likely pay more in interest. Creating a plan to eliminate high-interest debt can help you save a significant amount of money. Consider refinancing high-interest student loans or credit cards to lower your monthly payments.
Downsizing is a quick and easy way to save money to fund your down payment. Think about whether you can move into a smaller apartment or relocate to a more affordable area to save money on rent. You can also declutter your space by selling any items in good condition that you no longer need, such as clothes, electronics, toys, or kitchen gadgets. Consider hosting a garage sale or selling your unwanted items online or at a thrift shop to earn extra money that you can add to your savings account.
Automate Your Savings
Reach your down payment goal faster by setting up automatic transfers from your checking to your savings account. Think about how much you want to save each month to put towards your down payment and contact your bank to authorize an automatic transfer into a separate savings account. This can help you better manage your money and reduce the temptation to buy things you don’t need.
Taking things one step at a time and having a solid plan in place can help you save money for a down payment and help make the process less overwhelming. It might take time to accomplish, but with a few shortcuts, you’ll be one step closer to owning your dream home.