10 Tips for Saving a Down Payment

Improved from just a few years ago, the housing market has made a strong comeback overall. Therefore, due to the relatively low interest rates and improving job market, several people today are seriously thinking about diving into homeownership.\r\n\r\nHowever, if you want to purchase a home anytime soon, you’ll need to get serious about saving money for the down payment. Here are 10 practical steps that you can start taking today to reach your goal and get into your dream home quicker.\r\n\r\n1. Quarantine your financial savings.\r\nCreate a bank account for the sole purpose of saving money for your down payment. Pay your monthly bills, rent, groceries, etc. with your regular checking account, but your special home savings account is off-limits.\r\n\r\n2. Create a budget.\r\nThe idea is to save more than you earn. Therefore, your family budget is sacred. Stick to it regardless of your life circumstances.\r\n\r\n3. Put your savings on autopilot.\r\nTell your work’s payroll department that you want a certain amount of money sent straight to your savings account each payday through direct deposit.\r\n\r\n4. Save as much as you can.\r\nMaking big cutbacks may prove challenging. Skip the latte and change your daily routine. Saving seemingly small amounts of money wherever possible is a great way to quickly build up your savings.\r\n\r\n5. Save any financial windfalls.\r\nGetting a hefty year-end bonus or a $2,500 tax refund this year? As tempting as it may be to splurge even a little, use your restraint and save it instead.\r\n\r\n6. Save your money, but keep living.\r\nDon’t keep punishing yourself. Rather than letting your frustration continue to build, be smart by going out to eat or to the movies less often. Save money, but don’t stop living.\r\n\r\n7. Downsize right now.\r\nIf possible, move into a one-bedroom or studio apartment from a two or three bedroom apartment. In most areas, it can significantly drop your rent by 30 percent.\r\n\r\n8. Ask for help.\r\nAsk your friends to stop regularly inviting you out for drinks. Staying on a strict money saving plan will be easier if they support your cause.\r\n\r\n9. Save less money for your retirement.\r\nIf the company you work for matches your 401(k), it’s still a smart move to save enough money to qualify for their contribution. Another good option for young homebuyers is to use their retirement savings in their IRA in order to fund their home purchase.\r\n\r\n10. Work another job.\r\nIf you can take on more overtime at work or even another job, jump on each and every opportunity you can to potentially save even more money.\r\n\r\nUse these ideas to save your down payment faster, so you can purchase the home of your dreams as soon as possible.