November 27th, 2017 6:44 AM by Jackie A. Graves, President
Once you’ve decided it’s time to buy your own home, saving for that 20% down
payment is step one toward doing it. Instead of waiting years, here are six
ways to help you save up for that down payment in a matter of months.
you are saving money to buy your dream home, consider taking a detour through a
lower-priced neighborhood first. Buying a lower-cost home means you won’t have
to save as long for the down payment. As the home’s value goes up, you can use
the equity you’ve built to help you get into a higher-priced home later on,
particularly if you find a fixer-upper and you’re good at repairs.
it may be tempting to put off other priorities when trying to save for an
important goal, Kevin Gallegos, vice president of Phoenix operations at Freedom
Financial Network, says paying the rent should always be your first priority.
Next, Gallegos says, pay down credit card debt.
“Few, if any, investments will return as much,” he explains.
Additionally, having more available credit on your card will improve your
debt-to-income ratio and creates a financial cushion that you may need for
unexpected costs after moving in to your new home.
can create a budget based
on your current expenses to determine how much you can save each month. Once
you have determined how much you can afford to save, automatically transfer
that amount from your checking account to a savings account.
before you ever have the money in your hand,” Gallegos says. “Record this
expense like a bill every month.”
4. Generate more income
raise money quickly, Gallegos says it pays off to turn your spare time into
money-making opportunities. Look around your apartment for unneeded items to
sell online or have a yard sale.
small proceeds can accumulate surprisingly quickly,” he says. “Maybe you have
skills where you can turn a hobby into a part-time, money-making enterprise.
Babysit, tutor, do yard work or other part-time work.”
5. Track your daily expenses
pulling out your wallet, ask yourself how badly you need to buy something. For
example, if there is free coffee at work, do you really need to go to the
coffee shop every morning? Gallegos admits it sounds cliché to ask such
questions, “yet this is just the type of disciplined act that will get someone
on track to saving as much as possible as quickly as possible,” he says.
further reduce daily spending, Gallegos recommends paying with cash instead of
using a debit or credit card. “Many studies report that people spend up to 15
to 20% less when paying with cash,” he says.
6. Reduce household expenses
are many ways to reduce monthly expenses at home that can help build your
savings for a down payment more quickly. Washing clothes in cold water saves up
to 90% of the energy expended in the washing cycle, notes Gallegos. Switching
to cold water will directly reduce next month’s utility bill. Plus, speaking of
laundry, skip the dryer. That’ll eliminate carbon emissions and help you bank
away extra dollars, he adds.
should also eliminate drafts in your home and turn the hot water temperature
down to 120 degrees, which will save you money. Per EnergyStar.gov, a house’s
water heater “can waste anywhere from $36 to $61 annually in standby heat
losses and more than $400 in demand losses.”
only one of these ideas may not increase your savings significantly, but if you
try a few of them, it can make a real difference to your savings account after
a few months and get you on the right track to having enough for your new home.
This article was written by Ron Weber and originally published
on Credit.com. – To view this article
from Realtor.com click here