Tips for Saving for Your Down Payment

So you have decided to buy a house. You have attended a few open houses, scouted out the neighborhoods and talked to a few agents. But now, the reality is starting to set in. You need to have a down payment ready before you can acquire your dream property.

If you’re a little daunted about saving up money for a down payment, here are some tips to help you get started.

Save a portion of your monthly pay

An old yet reliable approach is to pay yourself first before you pay others. This can be done in the form of savings.

Set up a separate savings account that is exclusive for your down payment. Then, set up an automatic deposit from your paycheck to your savings account each month. Since you have separated your saving from the rest of your funds, you won’t be tempted to spend the money.

Eliminate luxuries

If you are serious about saving for a down payment, then you might want to cut back on other expenses. That said, your dream of buying a car or taking a trip to Paris may have to be put off.

Also, if you usually dine out at restaurants, you might want to start cooking at home and prepare your grocery list. This will not only help you save money, you’ll also be serving your family with healthier meals.

Pay off your credit card debt

This may not help you stow away cash, but you can’t really save money if you’re paying a lot of interest. Plus, you may not qualify for a home loan if you have too much debt.

Start by paying small debts with the high interest. Once your debts are paid off, it will be easier for you to save up money for your down payment.

Sell stuff you don’t need

Take a look at your stuff and get rid of things you no longer use or need. You can either organize a garage sale or sell your stuff online. Deposit a nice chunk into your savings account to get things going.