Create a Game Plan for Saving for Your First Home

by Keith Evans 01/10/2019

You’ve been thinking it for a while: “I really should start putting some money aside for a down payment.” But, you just can’t seem to find any wiggle room in your budget.

You’re not alone. Saving for a down payment isn’t easy. Especially if you’ve got rent, car payments, student loans, and are trying to put money aside for retirement.

In today’s post, we’re going to talk about how to make a game plan for your down payment. This way, you can start saving immediately, bringing you closer to your goal of homeownership each day.

Step 1: Give each dollar a job

The first rule of budgeting is that you need to know where each dollar you earn ends up. From there, you can start re-allocating funds to the things you want to save for.

There are many apps and tools available to help you out with this process, including YNAB (You Need A Budget) and Mint. If apps aren’t your thing, you can always use a simple spreadsheet.

First, account for all of your income. This could include your salary, rental income, or other forms of money that you have coming in.

Next, detail each of your weekly and monthly expenses. Everything from groceries to the internet bill and retirement contributions.

Step 2: Reassess your expenses

Now it’s time to make some tough decisions. Are there ways you can cut down on your weekly or monthly expenses? Maybe you aren’t using that Amazon Prime membership as much as you thought you would. Or, maybe you’ve decided you don’t really watch anything on cable but the news. There are a number of ways one might cut back on their monthly bills.

Get creative with family plans, bulk shopping for food, or cooking budget-friendly meals. All of these savings will add up quickly.

Step 3: Pay off small debts with high interest

Let’s face it, if you have thousands of dollars in student loans, you might not be able to aggressively pay them down by the time you want to move out of your apartment.

But, for small debts (under $1,000 credit card debt, for example), you could save more in the long run by paying them off and avoiding interest payments.

Step 4: Be smart about your savings

With the right savings account and credit card, you can earn money through savings interest and through cashback rewards on credit cards.

First, find a savings account with the highest possible interest rate. These can often be found from choosing an online bank who doesn’t have the overhead of running branches.

Next, direct deposit a set amount of your paycheck each week into that savings account. This way, you can be sure that you won’t dip into your down payment savings.

To generate additional income, you can use cash back rewards from credit cards for things like groceries and gas. Choose a credit card that offers the best cash back rewards for things like groceries and gas purchases. The key here is to only use your credit card on necessities and to always pay off the card in full at the end of each month.

If you follow these four steps, you should be able to streamline your down payment savings process and start saving right now.

About the Author
Author

Keith Evans

Professional Specialty Keith is a full-time senior-level real estate professional since 1998. He has been involved in buying, wholesaling, renting, developing and selling thousands of properties throughout Connecticut. Keith is a Luxury Property specialist and is also proficient in distressed/REO/short sale properties and leads a team of talented real estate agents that provide consultative services to clients. Areas Covered Fairfield & Litchfield Counties Professional Association National Association of Realtors Connecticut Association of Realtors SMART Multiple Listing Service Experience Full-time Real Estate Broker Owner/Operator - CEO of a Major Real Estate Company Managing Director Spencer Trask & Co. Vice President Sales Realtor.com IBM, Dun & Bradstreet and GE Held Board Seats at 2 publicly traded companies, Corporate Secretary Personal Skilled Negotiator Excellent Communicator Client Focused Strong Work Ethic Education Western Connecticut State University, B.A., Economics/Marketing GE Financial Management Program Licensed Connecticut Real Estate Broker Various Leadership Training at : GE, D&B, IBM, KWRI and William Raveis