Saving for a down payment is harder than ever with student loan debt at an all time high ($1.4 trillion in 2017) and rental costs rising. We have some ideas to help you not loose hope of owning a home some day! By planning ahead and leveraging technology, you can start saving for a down payment today.
1. Automatic deposits
Set up an automatic deposit into a savings account that occurs the day after you receive your paycheck so you know you'll have the cash available. If you don't see the money, you won't miss it! Some companies will actually let you set a dollar amounts or percentages of your paycheck and deposit it into multiple accounts for you. If you are unable to automate the withdrawal, set a reminder on your calendar for every two weeks.
2. Savings apps
There are a few apps that help you automate savings by rounding off each purchase you make to the nearest dollar and allows you to either invest the money or add it to a savings account. For instance, if you spend $7.56 on lunch one day, the app will take $.44 and save/invest it for you. It seems like a small amount, but if you think about how many purchases you make per month, it can add up! Check out the apps Acorns or Clarity Money that will round off your purchases.
3. Spend less
This sounds like a no-brainer, right? Do a deep-dive into your spending and discover any potentials for savings. Maybe make coffee at home every morning instead of stopping at the local cafe? Every month, aggregate your savings and put that whole amount into your savings account.
4. Clean house
Declutter your closets, shelves, drawers and cabinets! Sell anything you don't want or need on Craigslist, Facebook or other consignment apps. You may bring in only $20-$30 at a time, but it will add up when put into an interest paying savings account!
Have a reasonable goal when it goes to saving for a down payment. You don't absolutely need to have the 20% down payment ready when you want to buy a home. Due to down payment assistance programs and a variety of loan options, you can purchase a property with less than that. Give these ideas a try for a few months and watch that down payment add up!!