How to Save for a Down Payment

Whether you’re saving for a down payment or simply want to grow your bank account, try these tips to save money at home.

Set a Savings Goal

Setting a goal will help you know how much you need to save and track your progress towards that goal.

To save for a down payment on a house, start with our online mortgage calculators. Insert your own numbers, including income, downpayment, and loan terms, to get a picture of how different variables affect your house payment. Determine the affordability of your dream home and set goals to make it a reality.

For a more in-depth review, talk with your REALTOR about home financing options. 20% down is a convenient guideline, but there are programs and lenders that require less for a down payment. Your real estate agent can help you navigate different home loan programs so you can find the best option for your financial situation.

Ways to Save Money at Home

You don’t have to give up all of your coffee, or candy bars, or meals out to save money. However, making a series of small changes can result in big changes. Here are some tips:

  1. Start with your recurring monthly bills. Are there any you can eliminate or reduce? When you have a large pile of magazines stacking up, cancel the magazine subscriptions. Call your cell phone and cable companies to find a cheaper plan and lower your monthly bill.
  2. Eliminate duplicate subscriptions. For example, if you’re paying for cable TV and a streaming service, like Netflix or Hulu, cancel one and keep the other. Take advantage of the shows and movies available on one platform. This can be a tempory money-saving option, or you may find you only need one service.
  3. Switch to generic brands. Unless you have a strong preference for a specific brand, try the generic version. Generic products typically cost less than the branded version. Many stores offer generic versions of food, medicine, cleaning products, toiletries, and more.
  4. Eat at home. This goes for coffee, beer, lunch, dinner… as seen in Beer or Down Payment? How Much Denver Homebuyers Need to Save, you would need to skip a lot of beer to save enough for a down payment. However, you don’t have to give up all of these little luxuries. Instead of ordering that Starbucks Grande Caffe Latte, brew a cup of coffee at home. It costs less to cook a meal at home than to go out.
  5. Do-it-Yourself. If you are paying a company to clean your house or manage your yardwork, take these tasks on your own until you meet your savings goal.

Talk to a Financial Expert

Consolidating your student loans or other debt or requesting a lower credit card rate may be an option. If you aren’t already working with a financial advisor, ask your REALTOR to recommend a local expert. They can help you find ways to save money based on your unique circumstances.

Set a savings goal, make a financial plan, and start with small changes to save money at home.