One of the biggest hurdles to buying a home is the down payment. However, saving for your home’s down payment doesn’t have to be as difficult as you may think with a few budget tips. As with any goal, the first step is to define it – how much do you need to save? Typically, this number will be somewhere around 20% of the purchase price of the home.
Once you’ve determined this number, you can break this goal up into smaller monthly savings goals and even smaller weekly savings goals to achieve your down payment!
There are many budget tips to save or earn extra down payment money:
- Add income with a side hustle.
- Set up an automatic transfer to your down payment savings account from every paycheck. You can’t spend money you never see.
- If you receive unexpected money in addition to your regular income, bank it. Put tax refunds, birthday money or bonuses into your down payment account to see quicker growth.
Eliminate one restaurant meal a week and one entertainment outing a month, and instead put that money in your down payment account.
Thinking ahead is where down payment saving gets easier: the longer your timeframe until purchase, the longer you’ll have to save your down payment and the smaller the weekly or monthly amounts of money will be that you need to set aside.
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