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Saving for a Down Payment - Down Payment Advice
Saving for a Down Payment:
Down Payment Advice
Down Payment Advice
Saving for a down payment can be really hard.
However, there are many easy and interesting ways to save for a down payment! I hope you find the down payment advice in this article helpful as you save for your down payment!
Basically, there are two main ways to save money:
1. Make more money.
2. Spend less money.
However, there is more to saving up for a down payment then that! It requires a strategy and planning. Here are some steps you can use to save for your down payment.
1. Decide How Much of A Down Payment You Will Need
In order to start saving for a down payment, you need to know how much you want or need to save. You can use this down payment calculator to calculate how much you will need.
2. Decide When You Need to Have Your Down Payment
For every goal, you need to have a time frame. When would you like to purchase a home - in 1 year, in 2 years, in 5 years, in 10 years?
3. Figure Out How Much You Need to Save a Week
Now that you have decided how much of a down payment you will need and when you need to have your down payment, you can figure out how much you need to save a week.
Once you see how much you have to save per week, you need to decide if this is a realistic goal. For example, if you calculate that you need to save $900 a week and you make $1000 a week, that is not a realistic goal! Saving for a down payment needs to be realistic.
4. Keep a Record of Your Expenses
As mentioned earlier, your ability to save depends on the difference between how much you make and how much you spend. Since you generally have more control over your spending, it is a good idea to examine your expenses when saving for a down payment.
How can you do this? Get a notebook and write down everything you spend money on for several weeks. Do not leave out the small purchases - they can add up very quickly!
5. Trim Your Expenses
After you have recorded your spending habits over several weeks, review them. You will probably find that some areas where you can save money will be obvious. However, depending on how much you need to save, you may need to make some difficult decisions.
What are some general ways you can trim your expenses?
- consolidate or eliminate any of your debts
- save money on your vehicle - walk or bike when you can, make sure you have the best price on your insurance...
- save money on your phone - cut either your cell phone or home phone, limit your long distance calls or use a free computer service like skype...
- cut your cable or satellite TV service
- reduce your utility bill - turn off lights, turn off the computer when it isn't being used, turn down the heat or air-conditioning...
- save money on food - eat at home, buy in bulk, shop for deals, pack a lunch for work...
These are just some of the many ways you can trim your expenses. When saving for a down payment, you are only limited by your imagination!
6. Make a Budget
Once you have managed to balance your saving goals and spending, write a budget for yourself. This will enable you to stay on track.
Make sure that you leave a little room for some fluctuation in prices - for example, $20 a week. This can serve a double purpose as well - if you manage to make it through the week without using it, it is your to spend on whatever you want!
Give yourself this little reward - it will keep you focused on your goal.
7. Put Your Savings in a Seperate Account
Make sure to transfer your savings to a seperate account. Most banks offer special saving accounts with a higher level of interest. This will help you meet your saving goal!
8. Make More Money (Optional)
This last step is optional. If you are able to cut costs enough to save the money you need with the income you have - good for you!
However, not everyone is able to do this. In fact, I'm sure you could probably use some extra money! This would make saving for a down payment much easier!
How can you make some extra money? Well, there are the obvious ways: work more hours at your current job or find a second, part-time job.
What would I suggest? I would suggest you start your own home based business. That's what I have done! It is fun, easy, and you are only limited by your imagination.
Wishing you all the best in saving for a down payment!
This down payment advice is made available to you as a self-help tool for your independent use and is not intended to provide financial advice. I can not and do not guarantee its applicability or accuracy in regards to your individual circumstances. I encourage you to seek personalized mortgage advice from a qualified professional.
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