During this holiday season, it is projected the average consumer is going to spend more than they did last year. “NRF (National Retail Federation) expects holiday retail sales in November and December – excluding automobiles, gasoline, and restaurants – to increase between 3.6 and 4 percent for a total of $678.75 billion to $682 billion, up from $655.8 billion last year.” So needless to say, spending money is on your mind. However, this may be the perfect time to start saving for that 20% down payment, unless you are going to be using another type of loan that does not require a 20% down payment like a VA or FHA loan.
Nevertheless, saving money for a house can never hurt but maybe the idea of having to wait another year to save enough money is making you a little sick. Well, you are in luck! Here are six ways to help you save more money for that down payment and get you into your home sooner.
Explore the Market
Before you fall in love with that new construction or perhaps the house in an upscale neighborhood, take a look at some other options. Buying a lower-cost home means that you won’t have to save for as long which could get you in your dream home sooner. Plus, once you buy your home you can sit back and watch as your home’s value continues to go up, especially if you got a fixer-upper.
Focus on Priorities
We know you are tired of paying your rent and thinking about how much money you could save if you just skipped a payment seems tempting, but don’t do it. Continue to pay your rent and pay down any–and–all credit card debt. Having more available credit on your card will, not only, improve your debt-to-income ratio, it creates a nice financial cushion that you could dip into later down the road.
Automate Your Savings
Create a realistic budget based on your current expenses and determine exactly how much you can save each month. Then, automatically transfer that amount from your checking to your savings account. Save before you ever have the money in hand.
Generate More Income
In order to raise money more quickly, you may want to look into more money-making opportunities. Take a look around your apartment or rental home and see if there is anything you could sell. Even small amounts accumulate quickly.
Track Your Daily Expenses
Before spending any money, it is important to ask yourself if you really need this. For example, if you have free coffee at the office, you probably don’t need to stop at Starbucks every morning. To further your spending reduction, try paying with cash. Research shows that people tend to spend 15 – 20% less when paying with cash.
Reduce Household Expenses
There are several ways to reduce monthly expenses at home that can help build your savings for a down payment. For example, washing your clothes in cold water can save 90% of the energy needed during a washing cycle. Also, if you eliminate any drafts in your home and turn the hot water temperature down to 120 degrees, you can save more money. Implementing only one of these ideas may not drastically increase your savings, but trying a few of them might.