Article | Home Buying
Budgeting Tips to Help You Save Up for a Down Payment
Dreaming of a new home but need to build up your down payment? From simple meal planning to tracking when your bills are due, check out how you can save up toward homeownership.
Are you ready to get started on your home buying journey but aren’t sure how to start saving for your down payment? We’ve got you covered with small steps that can make a big impact! Check out our budgeting tips to help you save for your dream home.
1. Put a Little Away Each Month
To start saving, first you’ll need to know how much income you have to set aside. Look at each month's paycheck and calculate how much you make every month, excluding overtime or a side job or project – like food delivery or making online tutorial videos – where your pay or hours can fluctuate. If you do not have a set paycheck, write the minimum amount that you are guaranteed to receive each month. Next, simply look at how much money you make monthly compared to any debts you have — money you owe such as utilities, rent, medical payments, car loans, etc. Plan to put some of the leftover amount after paying debts into savings each month to help you save up for your down payment.
2. Create a Monthly Budget Calendar
Now that you know how much money you owe vs. how much money you make, you can split up your debts into their types. You could organize them by installment and revolving debt and mark down the due dates for each payment. This helps you see the month as a whole and makes it easier for you to plan your spending. Write expense due dates on your calendar or in a budgeting app to help you stay on track with payments. Make note of seasonal spending too, like items for back-to-school or holiday shopping. Finally, keep track of social events on your calendar, such as going on a date or to dinner with friends. By doing this, you can plan for these expenses and decide in advance how much money you will spend on each event to stay within your budget.
3. Create a Grocery Budget
Do you ever get stuck spending too much money at the store because of unneeded items? Make a weekly or biweekly grocery list of what you need to help you stay within your budget. Quick tip: Keeping a magnetic whiteboard handy on your fridge is a great way to add items to your list as you notice you are running out of them, which will keep you from having to make multiple trips to the store. Stick to the list when shopping so you'll know exactly how much you are spending. Also, use store and manufacturer’s coupons to cut down on your grocery bill.
4. Earn Easy Money
Need some extra money to meet your down payment goal? Here's how you can make easy money from the comfort of your own home! A few options include blogging, babysitting and reviewing consumer products online. All of these options are easy to integrate into your everyday life, and just think how much extra cash you will be earning!
So what comes next? Learn more about the journey home and the steps of the home loan process.
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