No matter the price range you’ve determined for your future home, the amount needed for your down payment and closing costs can be sizeable. As a first-time homebuyer, you might feel it’s challenging to save that much. But, don’t let that number intimidate you. With a solid strategy and some self-discipline, you can meet your savings goal.
If you haven’t already, open a dedicated savings account like the My First Home Savings Account. Then deposit a set amount into it monthly. This initial step can be crucial to your success.
TIP: Set up automatic deposits or transfers to make saving seem effortless.
Speed up your savings by making a few cost-cutting lifestyle changes. Every time you’ve shaved dollars off of your expenses, transfer it directly into your dedicated savings account. You’d be surprised how fast small steps can add up.
Here are five saving solutions you can use to save up for your first home’s down payment faster:
Keep food from taking big bites out your budget.
You’ve got to eat, right? Of course, you do! But, what you don’t have to do is spend a lot of money on food. You can save a lot in the long run by making small changes to your routine, like brown bagging your lunch and reserving dinners out for special occasions. If you find you’re too busy to cook daily, give meal prep and batch cooking a try.
You can also approach grocery shopping more strategically by:
- Making a grocery list (and stick to it).
- Limiting your visits to the grocery store.
- Checking your pantry to see what you already have.
- Using your store’s mobile app to clip coupons.
- Avoiding pricey prepared and precut foods.
Entertain the idea of low-cost pastimes.
A night out doesn’t have to hurt your wallet, and a night in doesn’t have to be boring. All it takes is a pinch of creativity and resourcefulness. If you’re itching to get out of the house, check your community calendar for free or low-cost events, such as free concerts, movies in the park, art walks, community markets, free museum days and local music shows. Also, keep your eye out for ticket specials and open houses at your favorite venues. If you’re a social butterfly, connect with others at association meetings, community fitness groups or inexpensive art classes. Then bring home what you learned, and voilà! You have a new hobby to occupy your downtime.
Turn your passions into extra income.
It’s no longer necessary to get a second job to bring in extra income. Instead, find enjoyable ways to make extra money on the side. If you’ve perfected a particular craft, sell your work online. Or offer to do handy work for others, like hanging shelves or assembling furniture. Do you like collecting things? Sell some of it. That way you’ll have less to haul away on moving day. The list of opportunities goes on and on.
Give your checking account a checkup.
It’s always a smart idea to give your checking account a checkup every few months. Start by checking your account’s vitals by using a spending analysis app. It’ll help you evaluate where your money is going, so you can make adjustments. Then look for automatic withdrawals you may have forgot about for unused services, like subscriptions for streaming services, gym memberships, and online gaming accounts. Some may be as small as $5 a month, but if you have several they can take an unnecessary chunk of change from your budget.
Make sure windfalls land in your savings account.
Did you get a nice tax return this year? How about that birthday money from grandma? Sure, you could go out for a night on the town with that money. But if you do, you’ll never see it again. Be wise with your money. Add it to your savings and watch it grow. You’ll find more joy in being that much closer to buying your first home. Similarly, if you earned a raise this year, add it to your automatic deposit right away — that way you won’t miss that extra income.