So this year you’ve finally decided that you want to start saving up to buy that home that you’ve been dreaming about for years?
You’ve narrowed down your choices and found that perfect little mid-century cottage in the heart of that new, hipster neighborhood. Unfortunately, the down payment seems to be a bit of a stretch. Don’t worry, you’re not alone.
There are young people all over the U.S. who have trouble saving up that 20% to make a down payment on a new place. Luckily, we’ve got a couple tricks up our sleeves on how you can start saving this year to get closer to buying that home you’ve always wanted.
1. Get A Side-Hustle Going
This may seem pretty obvious, but it’s true that making more money will help you to save more money. It isn’t out-of-the-ordinary for people to have multiple jobs or streams of income these days. Having a side-hustle can mean anything from working a part-time job after your day job to starting an online business. It’s up to you what works best!
2. Pay Off High Interest Rate Debt
You might have a high interest rate credit card or loan at this moment. The higher the interest rate, the harder saving money in the long run becomes. There are many ways to pay off high interest rate credit cards, including transferring the balance to a low interest rate card or seek out the help of a credit counselor.
3. If You Have Investments, Start Selling
Your home is going to end up being one of the biggest investments in your life. The cool thing is, as you begin to pay off your mortgage more and more, the more equity you have in your home. If the value of that home increases over the years, you can say that you’ve made a return on that investment. Essentially, it would make sense to sell some of your smaller investments now to make this bigger investment for the future.
4. No More Big Vacations For a While
If you’re serious about saving up some money for your down payment, the $5,000 trip to Europe is out of the question. This doesn’t mean you can’t enjoy yourself though. See what’s going on in your own neck of the woods. Plan an inexpensive road trip. Go camping! There are plenty of ways to explore and adventure without spending an arm and a leg.
5. Start Transferring Into Your Savings
One of the best ways to save is to transfer a portion of your paycheck away at an allotted time. If you get paid bi-weekly, for example, set up an automatic direct deposit from your checking account to your savings. Your savings will now act as your down payment account. Don’t dig into this unless it’s an emergency and you will soon realize how much extra money you have that you aren’t spending.
There are so many ways to save up for a down payment on your dream home. A lot of it comes down to budgeting, lowering your overall expenses, and putting away money periodically. Do you have any life hacks that help to save up for a down payment? Let us know in the comments!