Purchasing your own home is one of the greatest and most rewarding experiences you can have. However, one of the hardest parts of becoming a home owner is getting your down payment together. While there are many different loan types available, several require a 20 percent down payment. Trying to get that money together can be difficult and will require a few years of commitment.
Here are a few tips and tricks to help to reach that 20 percent.
Calculate what you can afford– First thing you need to decide on is your budget. How much do you want to spend on a house and what will the down payment be? What is the ultimate goal? Knowing what you need and having a set number in mind can help ease anxiety and help jump start the savings. I can help you calculate numbers to see what best suits your life.
Budget– Decide how much money needs to go to specific areas in your life (bills, grocery, gas, play) and any overage can allow for a small amount to go towards your savings goal.
Open an account– Have one account that is strictly for your down payment. Do not borrow money from this account for other expenses. Budgeting in a small amount to be deposited in monthly will help slowly, but surely, build the account. When bonuses are given, put these directly into this account.
Splurge less– Try to skip a coffee run and instead prepare your drinks from home or eat in more than dining out. These few dollars every day can add up quickly over the years.
Visualize the goal– While it may take years to get the whole 20 percent together, visualizing and setting steps towards that goal can be very rewarding. Setting small yearly goals (save $2000 this year) and meeting them will very satisfying to see how much closer you are to owning your new home.
Don’t force it– Remember to be consistent and in time it will all work out. It may be a long process but in the end, you will be happy to have that 20 percent down, with lower payments and a great investment.