If saving for a down payment were easy then you probably wouldn’t feel such a huge sense of accomplishment when you finally buy your home. The majority of the population lives on a budget. Maybe you even live from one paycheck to the next, so the thought of saving up enough money to buy a house seems like an impossible task. Well, it may be more within your reach than you think.
1. Cut Back When You Can – You may think you can’t afford to save, but there is a good chance that if you evaluate your spending, you will find a lot of places where you can cut back. Do you splurge on a specialty coffee every day? Even if you only stop at the café Monday through Friday on your way to work that is probably around $100 you can save every month. Maybe you can cancel movie channels and trim your cable package and just use Netflix instead.
2. Trim Your Smartphone Plan – If you are paying for a high data package, but 90 percent of the time you are connected to Wi-Fi, you are wasting a lot of money every month. Are you paying for unlimited minutes, but rarely even talk on the phone? Here’s a good place to scale back your cellphone plan.
3. Direct Deposit – You can’t miss what you don’t see. If you have a hard time putting money aside every week to save then open a savings account just for this purpose and have your employer deposit the appropriate amount into your savings. If the money is taken out every pay period before you see it, you won’t even miss it being gone.
4. Borrow from Family – Before assuming your parents or close relatives won’t help you with your down payment, try asking them first. You may think they don’t have it, but maybe they would be willing to borrow against their retirement or cash in a CD. If you are getting married or graduating from college consider asking everyone for cash instead of gifts.
5. Down Payment Assistance – There are numerous federal and state programs most buyers don’t know about. All programs have unique qualifications and limitations, so if you don’t qualify for one don’t hesitate to try another. To find these programs open a search engine and input either your city or state followed by the words “down payment assistance.”
If home ownership isn’t an option because you don’t have a down payment put these strategies to use. You won’t have the money overnight, but if you stay committed, you will eventually experience the proud feeling you get when you officially own your own home.