Effective Ways to Save for a Down Payment on Your First Home

We have started to see more and more millennials make the transition from renting to buying. And while this trend is expected to continue, it can often be a difficult move to make. Putting together money for a down payment on a home can seem like an insurmountable challenge, but with a few smart changes to the way you save money, it can be much simpler than it seems,

Cut Back on Expenses

There are many creative ways you can reduce your expenses, without feeling like you are denying yourself the things you love. If you spend a few dollars on coffee every day at Starbucks, Consider brewing your own and using a travel mug. Cutting out an inflated cable tv bill and replacing it with cost-effective services like Hulu and Netflix is also a popular choice.

However, to really cut back on your major expenses, consider relocating to a less expensive apartment while you save. Moving to a smaller place with lower rent allows you to put the money you save directly toward a down payment on a home.

Out of Sight, Out of Mind

Another useful saving trick is to let your job’s payroll department know that you would like a certain percentage of your paychecks to be automatically deducted and placed into a designated savings account. Even starting as small as 2% can help you accumulate a decent amount of money over time.

Save Your Windfalls

Whether it’s your annual tax refund or a friend repaying a loan, get in the habit of putting your windfalls directly toward your down payment. It may be tempting to use this money to treat yourself, but every small amount you save brings you one step closer to your goal.

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