If you want to buy a house but don’t have the savings for a down payment, you are not alone. With rental rates that are higher than some mortgages, saving money isn’t always the easiest. However, it is possible! You may be asking, “How much house can I afford?” That’s the perfect question to ask to help you decide which of these ways will help you save for that down payment. You might even try using them all.
Cut Unneeded Spending
The first thing anyone should do before creating a savings plan is to figure out how much you’re spending. Some bank apps make it super easy to see where your money is going to analyze where you can make cutbacks. You should also consider pausing or canceling any unused memberships and subscriptions you currently have. For example, if you have a gym membership but haven’t been there in months, it might be time to cancel until you save the money you need. The same thing goes for video and music streaming services. Is it worth watching/listening to some ads for a while if it means you can live in your dream home sooner?
Sell Your Stuff
Do you have extra things in your current home that you just don’t use? Maybe you’ve fallen out of love with some items hanging in your closet. Whatever it is, you can probably sell it for a least a few bucks. You’re saving up for your dream home, and by selling your extra stuff, you’ll have fewer items you need to transport to your new house.
High-Interest Savings Account
If you don’t already have a savings account, it’s time to open one. Instead of opening a standard savings account at the bank, look at high-interest savings account options because it will yield interest quicker than your average savings account. Some high-interest savings accounts have an APY that’s over 2% which is 20x the national average. If your paycheck goes into your bank account through direct deposit, have some money deposited from each paycheck into this savings account, so the saving happens automatically.
Mobile apps that save automatically for you have started popping up. Acorns is one of many popular money-saving apps, so do your research to find the one that is best for you. Most apps with this function round your purchases up to the nearest dollar and stick the spare change in your savings account. You’ll be spending and saving simultaneously. Connect as many of your accounts as possible (even your credit card) to maximize your savings potential.
Start a Side Hustle
If you have some extra time to spare, consider starting a side hustle, so you’re making more money that will help you reach your savings goal. For those with a good driving record, food delivery and ride sharing are great ways to make that extra cash. If you’re artistic, maybe you could open an Etsy shop to sell your creations. Think about offering your services on freelance sites such as Upwork. The truly fantastic thing about side hustles is you can work it around your schedule, and it doesn’t have to last forever.