Saving money for the down payment doesn’t have to be hard. If you’re trying to understand how to save money, figure out how to spend less. There are endless resources that are available for you to use. These resources can help you manage and track your spending habits and help you learn about deals and discounts.
If you’re like most people out there looking for a new home, you have several options when it comes to purchasing your home.
Most people tend to rent or buy and while both these options have their pros and cons. There’s an alternative for homebuyers and that is rent-to-own in which case you rent a home for a certain amount of time with the option of buying after the lease expires.
The percentage of the monthly rent goes towards the purchase of the house if that’s the option you end up using.
Along with the typical fees you pay when you sign the contract, you’re also required to pay a down payment. If you don’t choose ownership, it is forfeited. If you do choose to buy the home, goes towards the final purchase.
Step 1: Create a Budget to Help You Save
The first step is to track your finances is saving money. Analyze where you can compromise on some of your spendings. Put your smartphone to use by installing apps like Mint, YNAB, and Clarity Money. All of these were created to show you an easy way to budget and save.
Step 2: Set up an automated savings plan at your bank.
Allocate a percentage of the money you make to go directly into a saving account where it can accumulate quietly.
Step 3: Lower Monthly Payments
If you’re shopping for a car, it’s highly recommended you choose a less expensive used car. This way, you don’t have to worry about higher monthly payments that aren’t necessary with a brand-new ride.
Step 4: Utilize your credit cards.
The negative stigma behind credit cards is understandable. Doing research and finding the right one for you can help you save money in the long run. It’s easy to accumulate points for purchases and most of them having sign up bonuses you can take advantage of too.
Step 5: IDA or Investment Development Account program
If your income is low, you may be eligible to participate in an IDA or Investment Development Account program. This would match your savings. In return for you attending financial education sessions, you can receive at least $1 for every $1 you save. There are local programs for your area so do some research and see if you’re eligible to participate.
We also encourage small acts like cutting down on energy bills, buying secondhand and thrifting, cooking meals at home instead of going out and skipping that daily latte run. Creating these smaller habits will lead to a lot more savings than you think. Setting up a budget and getting a good hard look at your habits can be so beneficial. When you factor in your future needs instead of your current wants, you’ll be surprised at how quickly you can save for a down payment. Allowing you to finally get the home you’ve always wanted.
“I want my home to be that kind of place–a place of sustenance, a place of invitation, a place of welcome.” – Mary DeMuth
