• Great Ways to Save Money for The Downpayment on Your First Home

    So you’re looking to buy a home. Congratulations! Buying a home is one of the most exciting ventures in ones life. When one considers buying a home, the first thought they usually start to have is how much money they’re able to spend toward a down payment. The general rule is that you should have at least 20% down to put on a house. This is because you’ll get better rates, and you’ll have a lower mortgage each dollar more you spend te2b30e383db091135bbd0d96fc3ea67ao put down. As down payments are thousands and thousands of dollars, it usually is overwhelming to a buyer to think about how they’re going to come up with that much money in cash! Everyone has to spend time saving for a down payment. Here are some ways to help you do the same.

    The very first thing to do is to check out your budget. Assuming you have one; if you don’t, this is actually something you should have been doing for quite some time. Budgeting is a useful tool for anyone; even if you are sixteen. Budgeting helps you learn to manage money, and see visually what you are spending and where you can or should cut back. Even the 1% of the wealthiest people in the world budget. No one is saying you can’t get a haircut or a manicure, but you should look at what you’re spending; otherwise, you won’t be able to know how much money you can put aside end of each month. And, if you don’t know that, you won’t know when you’re going to be able to reach your goal. With budgeting, you’ll get a pretty clear indication of when you’ll reach your down payment goal.

    Don’t think that just because you’re earning a hefty salary, that you don’t need to budget. Like we said above, budgeting is a tool that everyone uses. When you know what you’re spending, you’re able to decide exactly how much you can put into your savings every month (hopefully you already have a savings account!). If you do not have a savings, now is the time to open one. Savings accounts are great, because it makes it harder for you to spend money. You’ve got to actually go to the bank, and by the time you get there, you’ll likely have decided on the drive that maybe you shouldn’t buy a new car right now. Also be sure to deposit any extra income you receive; unless you really need it for something important. Tax returns are always exciting, but perhaps instead of treating yourself to a week at Sandals, maybe you should save it instead!

    54f0fbd48fba0_-_1-couple-vacation-tropical-lgnConsider not buying name brand items as well. No one will judge you for having off-brand almond butter. You’d be surprised at what you’ll save each month by shopping at Costco rather than Whole Foods.

    While you’re saving for the down payment, maybe re-think that huge house you saw if its only you moving into the house. While you probably love it, you won’t have to put as much down if you buy a smaller one. Be realistic in your needs when it comes to the size of the new home. If you’re currently ren8565846_origting, consider moving into a tinier apartment if its very spacious; rent is very expensive, and every dollar counts when saving for a down payment.

    Also try to get more hours in at work, or ask for a raise if you’ve been doing well at your job. You’d be surprised; your boss may just g
    ive it to you! If you can, try to cut down on your social ac
    tivities. Now is probably not the best time to take your dream trip to Paris.

    You can also use your IRA savings when you go to buy the house; usually, taking money out of an IRA requires a charge. But, there are some instances where they won’t charge you provided you are using it to buy a home. If you find yourself having slipped up by maybe taking a big vacation, or eating out too often, don’t let it get you down. Everyone indulges sometimes, so just enjoy the memories you had on your trip, and start back on saving again.

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    Categories: Blogging

    2 thoughts on “Great Ways to Save Money for The Downpayment on Your First Home

    • Roger says:

      I know its bad to take out all of my savings to be able to buy the house, and while I enjoyed your article, even using those tips it will take me years to be able to afford the 20% down payment. What do I do?

      • Anthony Bell says:

        Hi Roger. Well..no one is saying you can’t take out all of your savings, only that it is unwise. If you are going to take out your savings, try to not take out every cent, and leave at least a few thousand for emergencies for after the home is purchased. Be sure that you have money to live for at least 6 months in the event that you get into an accident or lose your job. The point is to be sure buying the home doesn’t put you in a dangerous financial situation. Good luck.

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