The idea of homeownership can seem daunting if you doubt you can save up a down payment. After all, even a modest house on a conventional mortgage requires twenty percent plus the closing costs. When saving up seems out of reach, try these creative tips to grow your nest egg:
Delay gratification
A lofty word for a simple idea, delaying gratification means doing without for now so that to attain a specific goal. Nearly every budget has discretionary funds—what’s left over after paying rent, utilities, and other necessary bills. Once you’ve identified what’s left over, you get to decide how to spend it. When homeownership is the goal, some purchases become less necessary, and others can wait until you’ve attained your objective.
First, open a savings account specifically for your down payment. Consider setting it up in a credit union or a different bank from your regular financial institution so that the extra effort it takes to move it into your regular account mitigates the temptation to use it to pay bills.
Then, consider ditching these items for less expensive alternatives (or altogether) and putting the savings directly into your new account. Treat the savings as an expense, the same way you did the bill payment, or else the extra funds could just slip away:
Set a price on each of these events and pay that amount into your savings account. If you don’t isolate the savings, you’ll find it harder to keep it up.
Find alternative income
You could take a second job to add to your savings or a freelance gig. Put 100 percent of what you've paid into your savings account. Other options include monetizing a hobby (if it doesn’t cost you more money than you make) to sell online or through local outlets. Perform seasonal jobs such as raking leaves, shoveling snow or washing windows.
Put all loose change in a piggy bank (or coin jar). Determine to spend only paper money, then save all the loose change. When the jar or bank is full, take the coins to the bank or a coin-counting machine. Discipline yourself to put the cash in your savings account though so it doesn't slip through your fingers.
As you near your savings goals, reach out to your real estate professional for tips on finding the perfect home in your budget.
As a Florida native growing up in Sarasota, I am well suited to assist buyers and sellers find the perfect property and location to suit their desired lifestyle. My response time is extremely fast and I can turnaround answers to follow-up questions pretty quickly. I specialize in out of state buyers looking for their piece of paradise along the Gulf Coast and make it a priority to keep them up to date on our quickly changing local real estate market.