One of the biggest challenges young people could face is the difficult task of saving money for a reasonable down payment when buying a home. Generally, lenders will require a deposit of around tens of thousands of dollars, and saving this large amount of money is no easy task for a young adult who has just begun their career.
Money-Saving Tips for a Down Payment
That being said, there are some quick and easy money-saving tips a person can do without having to change their spending habits or their entire lifestyle. Follow these money-saving tips to help you save for a down payment for your future home.
Save Extra Income
Deposit any extra income you receive, outside of your salary, into a savings account. This means the money you received as a gift from family, tax refunds, or a bonus from work. Sure, it’s probably not the sexiest way to use this extra money, but it is the smartest way to save for your down payment.
Eliminate Unnecessary Expenses
You will be surprised by the amount of money you are spending on unnecessary services, memberships, and purchases each month. Review your recent bank statements, and you might just see that you are paying for a service that you no longer use or rarely use.
Try to differentiate a “want” from a “need”. Too many times, we will spend money on items that we want, such as concert tickets, new designer clothes, or the newest gadget. Avoid these expenses and spend your money on what you actually need like groceries.
As mentioned before, saving away for a down payment can be difficult, so celebrate financial milestones.
Set a savings goal for each year and treat yourself once you have achieved it, for example, a simple dinner reservation at a nice restaurant or a getaway weekend.
Doing this can help you remain on track for your goal, much like a once a week cheat meal when you follow a diet.
The Mortgage Mentors Can Help
It is a long and difficult journey when it comes to buying a home. That’s why The Mortgage Mentors are here to help you every step of the way. We will work at our best to help find you the best financial solution.