Perhaps one of the biggest challenges to overcome when buying a home is saving for that down payment. Various programs to that offer down payment assistance definitely make this feat a little easier, however, the truth remains that the more you put down the better rates you will get. Saving is a skill that can be developed with sound financial practices over time. Here are a few tips on saving for that down payment from Downers Grove Illinois real estate agent Shanon Tully.
Dimes and Nickels
A wise man once said, “Take care of the pennies and let the dollars take care of themselves.” In other words, if you manage the small amounts of money with diligence, the larger amounts will receive the same quality of management. One way to implement this is to take a look at how much money is spent each month on things like food out or that daily cappuccino. For example, if your coffee is purchased at the local coffee shop for $3.65, and you buy it every day, you are spending over $100 each month. Add to this money spent on fast food and you may be able to save several hundred dollars each month. Over the course of a year, this can be substantial.
Minimize the Big Items
Having tended to the small, next look at the big items. Is there a way to reduce your rent, for example? Perhaps downsizing to a smaller place with a lower rent payment for a while is the way to go. By saving twenty-five to thirty percent each month you may be able to have a decent down payment in a year. Sharing space is another option to consider. By getting a roommate you can pocket the amount that they are spending on rent.
Set Up To Save
Sometimes the biggest obstacle to savings is the inability to restrain from spending. Marketing companies know the “impulse buy” is powerful. One way to eliminate this dynamic is to set up an automatic deduction from your payroll check. Instead of relying on your will to actually deposit money into your savings, your employer may be able to do it for you. Wouldn’t it be nice to check the balance in this account after several months to find that a significant amount was saved?
Tax Returns and Bonuses
One last tip for saving for that down payment on a home is to save large amounts of money that come your way like bonuses and tax returns. By saving each month and putting away both of these types of income it is possible to save enough for a down payment in a year or two depending on the cost of the home. Keep in mind the short-term goal: you are saving for a home. Peruse online listings and dream about what your home will include to keep motivated. And when the time comes to start looking, contact a qualified real estate agent. If you are considering Downers Grove real estate contact Downers Grove IL real estate agent Shanon Tully.