In today’s market most down payments call for 20% of the home’s purchase price… a significant sum of money! On the flip side, having the full down payment can help you secure a better interest rate which, in turn, can get you the mortgage you want AND make your offer even more attractive to the seller. With this goal in mind, recognize that you have multiple options to save up cash to buy that dream home. Remember that life goes on even while you are saving for a home. Don’t sacrifice quality of life while you are working toward your goal. Think marathon not sprint when it comes to saving for that down payment. Take small steps to make a big impact on your savings plan and continue to enjoy your life during the process.
Don’t Cut Out Services – Just Adjust Expenses
Assess your monthly expenditures – Is there something you wouldn’t miss? Cut it out…now. Keep in mind you don’t need to cancel every subscription or service to save, but every dollar saved is a step closer to your goal. Next, look at the expenses you’re not willing to, or can’t give up. Call these providers and ask about your options. Are you eligible for any discounts or reductions? Is there another service tier or plan that still covers your needs but costs less? If not, look around for better rates with other carriers or competitors. You might find “new” customer savings.
Match Savings to Discretionary Spending
Follow this simple savings hack: Each time you go shopping or spend money on a discretionary item you want (But don’t need), keep track of the total amount of that purchase and then transfer the same amount from your checking to your savings. This matching contribution to your down payment savings fund forces you to think about your money in a new way and helps to prioritize your spending habits. If you have less cash to access in your checking account, you’ll make more conscious choices based on what is most important to you.
Change Your Home-buying Timeline
If you’re thinking of buying a home but want to continue enjoying life as-is, consider playing with your timeline. There’s no rule that says you have to buy a house right now. If you begin to think more long-term, you can attain your savings goal while still living the same basic lifestyle.
It stands to reason that saving for a $50,000 down payment in one year is much harder than doing it over the course of say three years. An easy way to figure what your savings goal deadline should look like is to determine how much money you need for a down payment? Let’s say your goal is to save the aforementioned $50,000 in cash for a new home. Now look at how much money you’re willing to save each month without doing anything too drastic to your budget. Take your goal amount and divide it by the amount you can realistically save each month. If you can save $1,000 per month towards that $50,000 goal, it will take you approximately 50 months to do so. Think about what makes sense for you and your family when you begin this process.
Tom Reese has 20+ years experience in helping his clients sell their homes for a price that sells and makes them a profit. Tom has helped his clients buy and sell property in every neighborhood in Northern Kentucky and Cincinnati.
About Tom Reese
Helping my clients attain their dreams has been the foundation of my success. With my strong attention to customer service, I have earned my clients continued support and referrals. Put my enthusiasm and dedication to work for you!
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Tom may be new to rapping but he’s not new to real estate!