4 Tips To Help You Save For A Downpayment

concept of mortgage and savings
A 20% down payment can seem daunting, especially if you are starting with a savings account at 0. But taking things a day at a time, and making adjustments to your lifestyle can ensure that your “someday” home becomes a reality sooner, rather than later. It might take 1 year to reach your goal of a down payment, or it might take 5 years. Whatever your realistic timeline is, why not start today? Truthfully, it takes a lot of discipline and self control to conquer your money habits, but it all starts with an adjustment in your mindset.  These 4 steps can be a great starting place for anyone.

1. Make a Realistic Budget and STICK With It:

Obviously the most basic first step for any type of money management; you have to tell your money where to go and control your spending. This is foundational in getting ahead and being able to save for your down payment. It’s essential that you work in a separate area of savings for your home into your budget. After mapping out where every penny will be spent for your month, and ensuring you have enough saved for a rainy day ($1,000 is a good place to start, by the way), you should have a separate allotment for your future home. If you aren’t sure where your money is going, there are several incredible resources available for you to use, but one of the easiest ones to get started with is mint.com, which– of course– is free. If you are using credit/debit cards, mint will give you some amazing insight into where your money is going. After looking at your money map, make sure you are cutting back and cutting out things that you absolutely can’t live without so you can boost your savings. Cut out cable, cut down on your food budget, set your thermostat to 78 in summer and 65 in winter to save on electric/gas, stop paying for services that you can do yourself.

2. Paper Over Plastic:

Sticking to a budget can be challenging, especially in today’s world of credit cards. It becomes way too easy to overlook where your money is going when you aren’t tangibly handing over cold hard cash. The fact is, it is much harder to part with your hard-earned money when you see it dwindling dollar bill by dollar bill. Whether you agree with his methods or not, money guru Dave Ramsey has an incredible system in place for this, called the envelope system. Piggy backing off of step #1, you will separate every category in your budget into individual envelopes and put the allotted amount of cash into each envelope. Obviously, this is only relevant for the areas that require cash. Things like rent, car payment, insurance premium, should only be coming directly out of your checking (and not on a credit card). Anything that needs more controlled spending will need to be in an envelope. Depending on what will work best for you, you can separate these out by week or by month. Make a point to spend some time each Sunday or on the 1st of the month to separate out your cash into each envelope. If you find yourself spending too much in a certain category in previous months, then account for that and adjust your budget as necessary. In order for this to be successful, you should stop using credit cards, and switch to debit only when you absolutely cannot use cash. While this method might not be for everyone, it is incredibly useful, especially for those of us who love to shop! Here is a great resource for the interested parties.

3. Sell To Save:

If you are passionate about meeting your goals and getting into your new home, you may have to give some things up to make it happen. Sell any excess; clothes, furniture, electronics, and knick knacks. Craigslist can be a great resource, and of course a yard sale is a good way to go if you have a lot of things to get off your hands. You could get really serious and sell your car if it’s eating up a lot of money every month. While it’s an extreme measure, it can be one of the easiest ways to catapult you into success. Consider carpooling, biking, walking, mass transit, or downgrading to a used car that you could purchase outright. Be successful at this step by honestly assessing your possessions and purge anything that isn’t being used, or that you could simply live without.

4. Mind Over Matter:

All of this effort could be in vain if you aren’t enjoying yourself along the way. Most people enjoy a good challenge, so try to make your goal of savings into a game. Here is a great challenge that is a creative way to a fun and rewarding savings. Partner with someone, be it a spouse or good friend, who shares your goals and vision. Call them if you’re struggling, or if you have to dip into your emergency fund and need a second opinion on what constitutes an “emergency”. Play the game together, or see who can save more each month. Mindset is everything. If you feel you aren’t able to enjoy yourself, you will fall back into old bad habits. Instead of thinking about what you are missing out on each month, think instead about how much closer you are to your goal. Get creative, and make a vision board of things you would like to be able to afford someday. Positivity will not only make the journey to savings more enjoyable, it will ensure you are successful.

Have you mastered the art of saving and have your down payment stashed away and waiting to be put to use? Whether you are still working on saving that 10-20%, or have it burning a hole in your bank account, we can help find just the place that you can call home. Call us today to check in with our talented agents, who are well versed in the Nashville real estate market and will be sure that you and your hard earned down payment are in good hands! (615) 807-0579

Trackback from your site.

About our blog

+1 us on Google Plus!

Find Us On Social!

   

Our E-Card Series:

Contact Us Now