Sometimes you may question if it’s really possible to save 20% for a home down payment. But we are here to tell you it is -- if you go about it right. It can be daunting to think about setting aside five figures or more but it’s not always as difficult
as you think. Let’s walk through some ideas we have for to you save for your new home.
Figure Out How Much You Need to Save
The first step in saving is figuring out the amount you need to save. Talk to a lender to determine how much you will need for a down payment. Once you have this amount, start allocating part of your monthly income to reaching that amount. It’s advisable
to not set aside more than 30% of your income towards housing, so however much you are spending now, use the remaining percentage towards your new home savings.
Up Your Investments
If you want to up your saving process you might need to take the steps to get a better return on your money. One way of doing this is through investing in stocks. With big risk comes big rewards. But beware, big risk can also mean big let downs. Make
sure to consult an investment advisor to see if your investments are getting the best returns.
Re-Evaluate Your Budget
Go over your monthly bills and see if there are any you can cut out or reduce. This could mean shopping around for cheaper phone and cable plans, reducing the amount of money you spend eating out, or cutting back on vacations. All of these small savings
over time can lead to big chunks of money set aside for your new home.
Do You Need a Second Source of Income?
Maybe you’re in a position where after you’ve evaluated your monthly budget and know how much you need to save, you don’t see yourself buying a home with your current income. This is when it’s time to consider working more or securing a second source
of income. Can you put in overtime work at your job? Do you have any side hobbies that could make you additional cash? Wood working, graphic design, even selling some unused items in your home on E-Bay are all great options to bring in extra cash to your
Extra Money Should Be Set Aside
Any bonuses or tax returns should be set aside into your savings. While it’s tempting to splurge after these unexpected checks, this is money that can help you achieve your goal of buying a home. Think long term when you get a bonus, not immediate gratification
at the mall.