As a result, borrowers need to save for a down payment, in addition to other savings.
Here are 5 tips that have helped people tighten their belt to save for a down payment on a home, while continuing to save for all the other things in life.
#1 Budget Your Finances and Keep Records
Smart budgeting practices can help you save the extra money they need to make a down payment on a mortgage.
Creating a budget, and living by it, may be the most important aspect of saving. Correspondingly, keeping records of your finances to keep yourself accountable is important to instilling discipline.
It’s easier to set money aside for a down payment if you carefully monitored your income and expenses. Keeping track of your income and expenses on a spreadsheet, or using a computer program like Quicken, helps you track and regularly analyze your finances.
#2 Conserve on Utilities
Conserving utilities in another way of saving hundreds of dollars every year.
The simple things such as turning off lights and other electric devices when not in use, can add to your monthly savings. But the bigger things, such energy saving appliances, heating, air conditioning, etc. can quickly add to the savings.
#3 Commit to Couponing
Couponing has saved some families hundreds of dollars over the course of a year, which can contribute a great deal toward saving for a mortgage down payment.
Collecting coupons from various sources can give homeowners the chance to save big on groceries, entertainment and other everyday purchases.
Look at coupons as free money, and remember that a penny saved is a penny earned.
#4 Limit Credit Card Usage
For many consumers, credit cards can be the death of savings.
Try to live within a reasonable budget and have an emergency fund so credit cards are rarely needed. Then, save for a down payment on a home in addition to everything else.
#5 Conserve on Transportation
All the costs associated with 2 cars, including the car payment, fuel costs, insurance, and repairs, could add up to what you need for a down payment on a home.
Though, it’s not practical for many of us to go without a vehicle, it’s possible to conserve on transportation expenses. Cutting back on transportation expenses by as little as 10% can go a long way toward saving what is needed for a down payment on a home.