The idea of saving enough money to buy your own home can seem daunting. A downpayment for a home needs to be at least 3-5 percent of the purchase price, which even for a $100,000 home is $3,000 to $5,000 you’ll need up front.
So, how do you save that kind of money? We have some money saving tips and tricks to help you be more frugal and save money fast.
1. Come up with a time frame
Decide when you want to buy a home. If your goal is to buy a home next year, that gives you 12 months to save up for your downpayment. If you want to put 5% down on a $150,000 home and start saving now, you know you need to put back $625 a month to make it happen! Now that you’ve broken it down like that, it doesn’t seem as scary right?
2. Set up a separate bank account for your downpayment
If your downpayment fund is separate from your normal checking account, it adds an extra reminder to not touch that money. A separate account will also make it easier for you to track how much you’re saving and how close you are to the amount that you need.
3. Cut down your spending and amp up your savings
- Make lunch at home
If you spend $10 a day on lunch, that can add up to $300 a month. Take that money you’d normally spend and tuck that away to put toward your new home.
- Brew your own coffee
Those $6 specialty lattes start to add up after a while. Buy a to-go mug for your home brewed coffee and save that money instead.
- Pick up a side gig
Start driving for Uber on the weekends or use some of your skills to pick up freelance work online.
- Cancel your gym membership
This isn't an excuse to be a couch potato. There are plenty of videos online so you can easily work out at home for free. If you prefer to be outside, go hiking or running.