9 Ways to Save for a Home
Saving for a house can be daunting proposition, but it’s not impossible. Try these home buying tips to help make saving a little easier.
This article was originally published on Capital One’s BrandVoice
Sponsor content courtesy of Capital One
Does saving for a house seem challenging? It can be a little daunting, but it’s also exciting. It’s a new step in your life, a brand-new chapter. And figuring out where to start can be overwhelming, so we’ll show you some home buying tips that may make saving easier.
Pay Off Your Debt
One of the top home buying tips is paying off your debt first. Before you really start stashing cash for your down payment, the best thing to do is pay off your credit card debt. Once your debt is paid down, you’ll be freeing up some money in your budget to start setting aside each month.
Plus, with no credit card debt, you may improve your credit score in the process by lowering your credit utilization ratio. This will potentially allow for a lower mortgage rate when you apply for a home, saving you money over the years.
Look Into Your IRA
A IRA is an account that lets you save for retirement by investing in stocks, bonds or mutual funds. But can you use your savings for a down payment?
It may be possible to withdraw your money penalty-free, including when you’d like to buy, build or remodel your first home. If you qualify as a first-time home buyer, you and your spouse can withdraw money from your IRA accounts to fund your down payment together.
See Who Can Save the Fastest
See who’s the best at saving for a house. Challenge your spouse and set a goal. See who can reach that goal first, and when it’s reached, celebrate with a nice dinner at home.
To really get motivated, team up with another couple and see who can save the most the fastest.
The challenge can be something as simple and as small as a change jar—see who can fill it up the fastest—or something larger, like who can save $1,000 first.
Make Your Savings Off Limits
Make a completely separate banking account for your savings—one that’s not connected to your debit card. This way you won’t be tempted to dip into it. This money is off limits. Don’t touch for any reason.
Save 100% of Windfalls
You might want to splurge a little when you receive that tax refund or year-end bonus. But you’re saving for a house, remember? Put the money into your dedicated savings or investment account for your down payment and you’ll be thankful later. You’re buying yourself the nicest gift of all—a house. It’ll be worth it.
Downsize Before You Upgrade
It doesn’t sound ideal, but one of your largest monthly expenses is probably housing. Moving into a smaller apartment, or even into your parents’ home, for a few months will allow you to save some serious cash quickly. Remind yourself, this is only temporary and soon enough you’ll have a home of your very own.
Find a Side Gig
There are so many ways you can make money online. Taking up a side gig is an easy way to make an extra bit of cash to stash away towards your down payment. Finding side work as a personal assistant, a freelance writer or even dog walker can make you some extra money that will make your down payment grow.
Conserve on Luxuries
Date night might be an important event on your calendar. But, instead of expensive dinners or going out for happy hour, opt for a night in and put that money aside for your down payment. You’ll be surprised at how much it adds up.
Another expense you might be racking up is your daily latte. At almost $4 a pop, that’s well over $1,000 a year on coffee. Make flavored coffee at home instead and put that grand aside.
Lower Your Insurance
Besides your housing, your car insurance might be one of your highest monthly expenses. There are ways to lower your payment and sock away the difference. Talk to your insurer and see if you’re eligible for a good driver discount or shop around and compare rates.
Saving for a house can be stressful, but these tips should make the road home a little smoother.