Purchasing a Home: Saving Tips for your Down Payment

Purchasing a home is one of the largest financial decisions you’ll make in your lifetime, so it’s no surprise that saving up for a down payment can seem like a daunting task. Never fear! Here are seven tips to help you save!

1. Record your expenses: The first step in saving money is to know where you’re spending it. By recording all of your expenses you can see where unnecessary spending might be happening and regulate it. It also keeps you mindful of purchases, making you more likely to consider more frugal options during purchases.

2. Set up automatic transfers: Sometimes the easiest way to save is to never see the money to begin with. Setting up an automatic transfer when you get paid—or splitting your direct deposit—allows you to put money aside for savings before you even register that it’s there.

3. Cut the cord: If you are still paying for a home phone or cable, it’s time to consider cutting the cord. Between cell phones and television streaming services such as Netflix and Hulu, getting rid of these services can be a huge potential for savings.

4. Share your living space: Home expenses tend to be the largest monthly expense, and while this option can be quite drastic, it has one of the largest potentials for savings. Moving in with a family member, getting a roommate, or renting a room from someone instead of an entire home to yourself, can radically reduce your monthly living expenses.

5. Stop using credit cards: If you think you’re “saving” by spending on your credit cards instead, you’re going to be in for a rude awakening. The last thing you want to be doing while saving for a home is financing your lifestyle through credit. Leave your credit cards at home, in a safe place.

6. Cut an expensive habit: Whether you’re a smoker, daily latte drinker, or love online shopping, if you have an expensive habit, now is the time to reassess what it’s costing you. Cutting down (or quitting) smoking can save you both dollars and years! Drinking coffee at your office, bringing lunch to work, or going out less often on the weekend can also add up to quite the savings.

7. Save loose change: Putting loose change aside to save is a small enough task that it’s likely to be done without seriously affecting your budget. If you tend not to operate in cash, many banks offer programs—such as Bank of America’s Keep the Change Program—which rounds up purchases to the nearest dollar and transfers the different to you savings account.