Whether you’re planning on moving to a better neighborhood or you’re buying a home for the first time, saving up for a new home is a big step. If you are looking to buy a house in the near future, it’s important to build up your savings.
Down payments for homes can be large sums of money – so large in fact that it can set you back years if not saved or planned for properly. Most people think this means slowly setting aside small amounts, which, as you can imagine, would take forever. But, don’t worry! You don’t have to wait around and save for years. Here’s how you can quickly save up for that down payment:
Explore the market
Don’t get so focused on your dream neighborhood that you skip over the lower-priced neighborhoods. Buying a lower-cost home means you won’t have to save as long for the down payment, and you can always use the equity you’ve built to help you buy a higher-priced home later on.
Automate your savings
Creating a budget based on your current expenses will help you determine how much you can afford to save each month. Once you’ve determined a set amount to save each month, automatically transfer that amount from your checking account to savings account. It’s easier to save the money if you put it in your savings account before it ever ends up in your hand. Treat this expense like another monthly bill. There are even some services that do it for you – so you won’t have to think about it – but soon enough, your savings account will be burgeoning.
Generate more income
This is probably a no-brainer when it comes to raising money quickly, but it really pays to turn your spare time into money-making opportunities. Even small amounts from a yard sale or that raise you asked for at work can accumulate quickly.
Track your daily expenses
This is huge when it comes to saving money! Before you pull out your wallet, ask yourself how important it is that you make the purchase. For example, instead of stopping by your local coffee shop every morning before work, drink the free coffee at the office. To save as quickly as possible, it takes this kind of disciplined behavior.
Reduce household expenses
There are so many ways to reduce your monthly expenses at home. Washing your clothes in cold water will save up to 90 percent of the energy used in the washing-cycle. And, you can take it a step further and skip the dryer. Changing a few small things around your house can result in smaller utility bills.
By adding any or all of these ideas to your savings plan, your savings will increase significantly and it can make a real difference and get you on the right track to having enough money for a down payment on your new home.