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10 Easy Ways to Save for your First Home Down Payment

Posted by admin on March 6, 2014
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Saving isn’t something that happens over the course of the month. Like diet and exercise, results aren’t seen in the first thirty days. It’s a process and a lifestyle change, one you must be committed to. Saving does take work, but it can be easy if you stay on track, and when you finally save enough to sign for your first home, you will realize every penny pinch was worth it.

Here are 10 easy ways to save money for your home down payment. As you incorporate more of these tips into your everyday life, the savings will add up.

1.   Consolidate and Pay off Debt

Focus on consolidating your debt to a lower interest rate and paying it off as soon as possible. Don’t throw your hard earned money away in interest. The sooner you pay off your accrued debt, the sooner you can start saving money.

2.   Pay your Bills on Time and Avoid Late Fees

Okay, it’s time to get organized. Make a calendar of when your bills are due and set money aside every month to cover those costs. If possible, have your payments automated. Don’t get stuck forking out money for late fees on top of your bills. Little fees here and there add up. Imagine if they added up towards something positive like your down payment!

3.   Reuse Materials Whenever Possible

Grocery store bags can be used to line trashcans and Ziploc bags are usually good for more than a couple uses too. There are hundreds of “kitchen hacks” on the internet these days and ways to “upcycle.”  For instance, instead of buying new furniture, look around the house for something that can be spruced up by a coat of paint or re-imagined. These savings also keep you from producing too much environmental waste.

ways to save down payment

4.   At Home is Best

Try to eat and drink at home whenever possible. If you aren’t into this habit, acclimate yourself by cooking at home once a week and slowly increasing the frequency until you find a balance between saving money and getting stressed out. This tip includes making your coffee at home as well. Those grande non-fat white chocolate mochas add up!

5.   Make a List Before Going Shopping

Whether you are at the mall or grocery store, it’s hard to resist temptation when shopping. Making a list before you go shopping will help you steer clear of items you simply do not need. If you are grocery shopping for home-cooked meals, plan out a rough menu for the next two weeks, and compile a list of ingredients you need ONLY for those meals. The fewer times you need to go to the store, the less temptation you will encounter.

6.   Set Savings Goals

Determine what type of house you want and a rough estimate of its cost. Then calculate your budget based on your current income, debt, and other expenses. This will help you determine how much of a down payment you need to save for. In addition, establish a time frame for when you will meet your goal and how much money you can afford to set aside monthly or per paycheck.

7.   Keep Records of all Your Expenses

Keep track of the difference between how much you make and how much you spend. This is the money you are saving. You have control over what you spend, so really take a critical look at what you are spending your money on. Write everything down. Be as detailed as possible, and try not to leave out small purchases. Being visually aware of your spending habits will keep you focused and aware of unnecessary spending.

8.  Stop Accruing More Debt

Instead of paying for things on credit cards all the time, try paying for things with cash or money orders. Exchanging cash is more tangible and makes the spender more aware of what they are spending. It also reminds one of limits. With a credit card it can be easy to overspend. Credit cards are not necessarily evil. It’s about moderation and self-control. If you need to have credit cards but want to avoid temptation keep them restricted to a non-visible part of your wallet with a picture of the home of your dreams nearby.

9.  Open an Interest-Bearing Savings Account

Keep track of your savings by separating it from your spending money. Savings accounts are great because they remind you of its purpose (savings) and they also accrue better interest then checking accounts. For long-term goals, you may want to consider higher interest options such as CDs or money market accounts.

10. Regulate your Use of Electricity and Water

Unplug your electric appliances when they are not in use. Unplugging major electronics such as the TV can save a lot of electricity, and money. Turn off the lights at night, use a programmable thermostat or even a fan, and watch your water consumption. Wait to do laundry until you can do a full load and try to limit your shower length.

Keep positive and remember every little bit helps!

For more great information on home buying or help with purchasing your first home contact Prudential Beazley Real Estate at 706-863-1775.

Image Credit: Flickr

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