Start Saving Now for a Down Payment on Your First Home

Start Saving Now for a Down Payment on Your First Home

When it comes to buying a home, it is essential to tackle one thing well ahead of time: the down payment. Long before you start your search, you need to save. Here is how:

Set a goal. Even a modest down payment can be more than many first-time buyers have ever saved. The median down payment is about 7 percent. For example, with $200,000, that comes to $14,000. Saved in a year, that comes to $1,167 each month. This is why it takes several years for most people to save for a down payment.

Track your progress. Once you set your goal and timeframe, post it on a chart where you track your progress. Check regularly to see how you’re doing. Don’t forget to pat yourself on the back for progress, but also note how much you have left and prod yourself to keep it up — and maybe dig a little deeper.

Remember inflation.  It is absolutely necessary to plan for inflation. The house that costs $200,000 today may not cost that much in a year or two.

But how should you go about saving for your dream of homeownership? Consider these suggestions:

  • Set up a space to put your savings where it’s not in the mix of your regular spending money.
  • Cut back on frequent small luxuries like coffee-shop drinks because every bit helps. Further, make sure that the amount you saved goes toward your down payment. For example, if you cut a daily $5 coffee expense, at the end of each week transfer $35 to your savings account.
  • Analyze your spending. Do you need a new $80 pair of jeans? Or will a $30 pair meet your needs? After deciding, transfer the difference to your savings account.
  • Make your savings automatic by setting up an automatic payday transfer. After all, if it’s out of sight, it’s out of mind.
  • Use a cash rewards credit card, then transfer the cash value of those points to savings. However, beware of the temptation to justify more spending since you will be earning points.
  • Save any windfalls. If you receive a tax refund or a bonus at work, save it.
  • Consider getting a second job such as babysitting, dog walking, yard work or take a part-time job on the weekends. Anything to help you meet your goal of homeownership.

Start Planning for the Southern Home and Garden Show

The professionals who can help you find your dream home or remodel your current home will be exhibiting at the Southern Home and Garden Show March 1-3 at the Greenville Convention Center.  Make plans to attend now by visiting www.SouthernHomeandGardenShow.com.