7 Money Saving Goals That Will Put a Down Payment on Your New Home
In the US, the median sale price of a house is $327,100. If you want to save a 20% deposit to purchase a home, how on earth can you do it?
Saving for a down payment on a home is one of the toughest parts of the home-buying process, but if you’re smart and set money saving goals, it can be done!
If you’re hoping to buy a house in the near future, you need to get your finances in order. To learn more, keep reading to find seven tips for smart budgeting that can help you save for your down payment.
1. Cut Your Expenses
If you want to save up for your home deposit, smart budgeting is critical. In theory, it’s simple—the more expenses you can cut, the more you can save.
However, this can be a challenge, as it’s hard to know what expenses you can let go of. It helps to print out your bank statements from the last few months and go through your spending, line by line.
Can you cancel your gym membership and exercise outside? Or, dine out less often and try to cook more meals at home?
Even small expenses each week add up over time, so you might be surprised at how much you’ll save over the course of a year by just making a few changes.
2. Pick Up a Side Job
Another great way to boost your down payment is by picking up a second job. If you want to boost your savings fast, but your current income isn’t cutting it, consider a side hustle like driving for a ride-sharing service, pet sitting, or helping neighbors with lawn mowing and gardening.
The advantage of a side hustle is that you can usually set your own hours, making it easier to earn extra money, even if you’re already working full-time.
3. Get a Roommate
One thing that can make it very hard to save for a down payment is rent. How can you save money when so much of each paycheck goes to paying rent?
It’s a definite challenge, but one way to save on rent is to take on a roommate. Instead of living alone, team up with a friend and move into a two-bedroom.
You’ll both still have your own space, but you’ll be splitting both rent and household bills, making it easier for you both to save.
Another option is to move back in with your parents. While not possible for everyone, if you can, you can save lots of money by living at home.
4. Sell Unwanted Items
Many of us have plenty of unwanted items sitting in the garage or at home—have you thought about selling them?
This can be a quick way to bring in some money that you can save for your down payment. Think about more valuable items you no longer need, like bikes, exercise gear, or furniture, and list them for sale online.
Sites like Craigslist, Facebook Marketplace, and Depop can be good ways to find buyers for your items—just take clear, detailed photos of each item and include an accurate description.
While you’re not likely to get the full value of the item, it’s still quick and easy money—plus, it helps you clear out your home!
5. Ask Loved Ones for a Loan
If you feel comfortable doing so, you might consider asking your parents or loved ones for a loan to boost your mortgage deposit. This can be helpful if you’ve found the perfect home to buy, but your deposit is just a little short.
Should you go down this road, put everything in writing and be sure to stick to the repayment plans as promised.
6. Set Up Automatic Transfers
Setting up an automatic transfer each month into your saving account is a good way to save, as you don’t need to worry about accidentally spending the money.
With online banking, it’s easy to set up automatic transfers, so that a set amount of your paycheck goes straight to your savings account.
Ask your bank or broker if they have incentives to help new homebuyers, like the First Home Super Saver Scheme calculator, as this can help you reach your goals faster.
7. Save any Incoming Funds Right Away
Are you expecting any large payments, like a work bonus or tax return? If so, the smartest thing to do is to pop it straight into the bank and put it towards your savings.
Although large windfalls can be tempting to spend on something like a vacation or new clothes, if you’re really dedicated to saving, then the best thing to do is save this money as it comes in.
Or, if you’re expecting presents for a birthday or holiday, you might want to ask others for cash gifts, rather than items. Just explain to them that you’re focused on saving for your home and that cash would be more meaningful to you than physical presents.
Use These Tips to Set Money Saving Goals for Your First Home
If you’re eager to buy your first home, these money saving goals can help you succeed. With some patience, research, and planning, you’ll be able to find an affordable home that’s within your budget, thanks to your savings.
Although it can take some time to save up a deposit, once you reach your goals, start talking to banks and mortgage brokers to find out how much you can borrow and get pre-approved for a mortgage.
After that, you can start shopping for your dream home!
If you found this article helpful, please keep reading to find out more real estate news and tips.