If you’re thinking of purchasing a home in the near future but you’re also concerned about not being able to afford the down payment, I encourage you to reach out to me. I can help you figure out your budget, what sales price you’ll qualify for when we get to that point, and then we can set a target goal for your savings on that down payment. You’ll also want to think about saving for closing costs, which are an additional fee that will occur in the buying process.
Additionally, a generally helpful thing to do is to assess your spending habits. A lot of people don’t realize how much money they spend at, say, Starbucks, or how much they spend on eating out. Look at your spending habits, and start making some changes. For example, instead of spending $5 on coffee at Starbucks, make a pot of coffee at home, and put the money you save into a piggy bank or savings account in order to move toward your down payment.
With that, here are five things to do so you can begin saving some money for a down payment on that home:
1. Reassess what you spend on insurance. Many people don’t realize that their insurance companies have the potential to bundle your home, life, and auto insurance policies together under a single policy. Doing this helps decrease your monthly payment; if your current provider doesn’t do this, it may be worthwhile to switch to a new one.
2. Examine your grocery bill. Until you have enough saved up for your down payment, it might be time to cut out a few extra things from your regular grocery shopping trip, like those extra chips, chocolates, ice creams, etc. How much money will that save you? And, further to that, how many months will it take you to get to your target goal?
3. Shrink your TV package. Many are unaware of all the extra fees they’re paying for this or that program on their cable package. Cable bills are often $100 to $150 a month, including everything from the router for your home wi-fi network to all the additional channels you may or may not watch anyway. Really think through how worthwhile your current package is, and see if there’s a way to cut back about 40% of your bill.
4. Look at your gym membership. January 1 is a popular day to start a gym membership, given it comes right after New Year’s. A lot of people lack follow-through, however, and forget that they even started the membership, meaning that they’re being charged for something they don’t utilize. If you want to stay fit and healthy at the same time you’re trying to save up for a home, try alternative fitness methods to paying for a gym. Work out at home, or with a friend if you need the motivation.
5. Sell some of your stuff. You can potentially make thousands by unloading your extra stuff via garage sales, estate sales, or websites like eBay and Amazon. It’s like the old saying goes, “One man’s junk is another man’s treasure.”
If you’re interested in learning more ways to cut back so that you can better position yourself to purchase a home in the future, reach out to us. We’d be happy to advise you further.