Tips to Save for a Down Payment on a Home

Money JarHomeownership can be very rewarding and is part of the American dream. Buying a home is also one of the most expensive purchases one can make and takes some planning. If you are thinking of becoming a home owner, you will probably need a down payment for your mortgage. Here are some tips on how to save money for a home:

Open a Savings Account
If you do not already have a savings account, be sure to do so. Start putting money automatically into that account.

Live on a Budget
By creating and sticking to a budget, you will see the benefit of saving money. A budget clearly lets you see what you spend your money on and where cut backs can be made. Perhaps the entertainment budget can be cut back. Or, plan on making amends to some retail therapy habits.

Credit Cards
Check the interest rates paid on your credit cards. Can you do better with these rates? If you are on time with payments, you may be in a strong position to negotiate a lower rate.

No Splurges
If you are enjoying a bit of extra money from a birthday, wedding or tax refund, refrain from splurging with that extra cash. Put that money into savings.

Rent on the Cheap
While saving for a home, keep your rent to a minimum. Can you live with relatives? Can you find an apartment that is not expensive?  (Remember, what you pay in rent goes towards your landlord’s mortgage payment.)

The Small Stuff
Will buying a cup of coffee stop you from buying a home? No. But, if you have a daily habit of buying coffee or picking up lunch, those costs do add up. A $3.00 daily coffee adds up to $1,000 in one year.  (The same goes for that gym membership you do not use.) Stop purchasing books and DVDs and start borrowing them from the library.

Can You Live Off of One Income?
A great way to save money is to live off of one income. One partner’s paycheck pays for living expenses and the other partner’s check goes towards the house fund.

Sell Stuff
Do you have things you no longer need? Sell them!

Stay-cation Instead of a Vacation
Instead of spending lots of money on a vacation, take a much more affordable stay-cation.

Get a Second Job
Having a second, part-time job is a great way to add to your cash flow to save money. Your extra efforts in working will result in a new home!

Start dreaming… Look at homes for sale here.

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