For many people, saving up for a down payment on a mortgage is a daunting task. Where do you even begin? Do you have to give up everything you love? Luckily, there are many small tweaks you can make to your budget that can end up saving you big in the long run. Here are ten tips to help you save $10,000 in one year for your mortgage down payment.
Start a budget: This may seem like an obvious place to start, but you'd be surprised how many people go through life without ever creating a budget. Knowing where your money is going is the first step to taking control of it. There are numerous helpful resources and apps available to help you get started, like Mint or You Need a Budget (YNAB).
Trim the fat: Once you've got your budget in place, take a close look at where you can cut back on spending. Maybe you can cook at home more often instead of eating out, or switch to a cheaper cell phone plan. Even small changes can add up over time!
Open a new bank account: When it comes to saving money, separating your savings from your checking account can be very helpful. Many banks offer incentives for setting up direct deposit into a savings account, like waived fees or higher interest rates. This will help you grow your savings even faster.
Make it automatic: Set up automatic transfers from your checking account into your savings account so you don't have to think about it every month. This way, you'll be less tempted to spend the money elsewhere.
Pay with cash: Whenever possible, pay for purchases with cash instead of using a credit or debit card . This will help you stay within your budget and avoid overspending.
Bank savings incentives: Many banks offer special programs or interest rates for customers who are trying to save money . Be sure to ask your bank about any programs they have that could help you reach your goal quicker .
Make it a game: Trying to save large amounts of money can feel daunting , but there are ways to make it more fun . One way is to set up a "save the change" system where every time you make a purchase , the spare change gets deposited into your savings account . Another option is to give yourself small rewards along the way for hitting certain milestones , like ordering takeout after reaching your goal .
Spring clean: Use the warmer months as an opportunity to make some extra cash by decluttering your home and selling unwanted items online or at garage sales . Not only will this give you a boost of motivation , but it will also help declutter your living space
Ask for a discount: Whether you're negotiating your cable bill or looking for deals on car insurance , always be willing to ask for a discount . You never know how much money you could save just by asking!
Cool off on the AC: During the hotter months , keep your air conditioning use in check by raising the temperature when you're not home and making sure all doors and windows are shut tightly when the AC is on . You could see significant savings on your energy bill each month.
Example Savings Plan:
- Cut cable: $103 x 12 months = $1,236
- Cut gym membership: $50 x 12 months = $600
- Make Coffee at Home: $2.70 x 52 weeks = $140.40
- New Bank Account: $200
- Automatic Transfer: $100 x 24 paychecks = $2,400
- Pay With Cash: 20% saving on $200 x 12 month = $480
- Roundup Change: $10 x 12 months = $120
- Cook at Home: $250 x 6 months = $1,500
- Spring Cleaning: $500
- Switch Car Insurance: $50 x 12 months = $600
- Energy Efficiency: $200 x 12 months = $2,400
Total: $10,176.40How to Use Your Credit Card to Improve Your Credit Score
Saving up for a mortgage down payment doesn't have to be painful! There are lots of small changes you can make that will add up over time! By following these ten tips, you can easily save $10,000 in one year! If you’re ready to start your purchase journey click the button below to get started.