Saving money is never easy. It always seems to take extra effort to put that cash away. However, the bigger your down payment, the less you have to ask for from mortgage providers. Not only that, but you will be able to demonstrate that you can make sound financial decisions, which may result in a lower rate from mortgage brokers. Use these tips to help you save for a home without causing yourself added stress.
Reduce Cost of Living
You want to buy a home so that you can live the life that you’ve wanted for years. That may mean reducing the level of your lifestyle for just a few years so you can put that money away for a down payment. Look for a rental that is less expensive, even if it costs just a hundred dollars less than you pay now. Keep in mind that the smaller a home is, the easier it is to heat and cool, so you aren’t just saving on rent, but utilities as well. Figure out what you are paying now and, when you move, put the excess funds in an account just for the purpose of saving for a down payment.
Minimize Home Efforts
Yes, you want your current home to look nice, but the fact of the matter is that once you buy a home, you are going to do everything different. That décor collection that might look fantastic in your rental may not look so great in the home you buy. Everything in a rental is temporary, so consider putting more money into your savings and less into your current home’s décor.
Automatically Deposit Savings
You can’t spend what you don’t have. Make sure part of your paycheck automatically goes into your savings account so you don’t even have to look at it. It’s tempting to spend what you have access to in your bank account, so just don’t give yourself access.
You might even create a completely separate account for your down payment so that it is not attached to your debit card for your checking account. Then it becomes a pain to have to go to the bank and withdraw anything from your savings, so you are more likely to pass on a purchase that requires those funds.
Maintain a Frugal Lifestyle
Many people adjust their lifestyle when they get a raise at work, or when they come across a financial windfall, like a tax return or an inheritance. Instead of changing your lifestyle, just keep living the way you have been. After all, it’s gotten you through life so far, hasn’t it? If you do happen to come across a bit of extra cash, just put it away in your savings account. You can even celebrate a bit with an extra dinner out that week, but put everything else away.