While it may happen at different times for different people, becoming a homeowner at some point is a usually a priority. The pride of ownership, the freedom to do what you want with the space, investing in your own home; everybody has their own reason, but the goal is the same.
While most people would like to buy a home, there are a few important steps to take before buying a home, one of which is saving for a down payment. If you’re thinking about buying a home, these tips for saving for a down payment can help you get started!
Think Long Term with Your Savings Goals
Slow and steady wins the race when it comes to savings. While there may be many ways to save money, the most tried and true option is sitting down early on, coming up with a concrete savings plan and then sticking to it. While it may be difficult to save a large amount of money in a few short months, if you give yourself more time and set up a defined amount to save per paycheck, the financial burden will become much more manageable. If you know you want to buy a home sometime in the next 2-3 years, give yourself a head start and begin putting a way a little each week.
Open A Down Payment Savings Account
The more automated you can make your saving process, the better. Saving money for your down payment should become a habit or, even better, something you don’t have to think about at all. Set up direct deposits, set a fixed amount, whatever you have to do make sure that you are consistently putting money into a dedicated account that you commit to not withdrawing from for any purpose other than your down payment. This will help you to both focus and to visualize exactly where you are and what you need to do to get to your goal. Remember, saving may seem hard at first, but seeing the account grow will motivate you to reach your goal and buy your first home.
Cutting Costs on Daily Expenses
We all know there are things we buy on a daily basis that we don’t really need to spend on, but we rarely take the time to think about how much we are actually spending. If you’re the type of person who hates to cook and is always on the move, chances are you buy lunch fairly often. It’s not unheard of for a combo meal to come in around $10. With 261 work days in a year, that’s $2610 just on lunch. The internet abounds with blogs on how to prepare filling, easy to make lunches, often for under $2-$3 dollars. Taking the 10 minutes at night to throw together that sandwich and some quick snacks could save you $2000 per year. And that $2.50 cup of coffee every morning? Brewing it at home could easily save you another $500. You can see how cutting small expenses can start to add up to savings.
Cutting Down on Entertainment Costs
The average American household spent over $3,000 in entertainment expenses last year. Between taking an Uber, going out to eat, going to shows, drinks and tips, going out can be a pricey ordeal. Having fun with friends and family is an important part of life, but for a short period of time and keeping the bigger picture in mind, finding cheaper ways to have fun will be worth it when you’re going back to your own home, right?
However you choose to reach your savings goal, Mechanics Cooperative Bank wants to help you reach your goal of owning a home. The same friendly bank you trust with your savings also has years of experience helping first time buyers navigate the mortgage and home buying process. Come in to speak with one of our Mortgage Specialists to set up a plan that is right for you!