Save Up For That Down Payment

In a few previous posts, I discussed how putting down 20% of the listing price helps buyers construct stronger, more competitive offers. However, 20% may be a good-sized chunk of your income. Here are a few tips to help you save your money and be able to present a great offer to buy the home of your dreams.

Start budgeting

It’s important not only to set a realistic budget for yourself, but also to keep track of all your spending. You obviously can’t cut out fixed expenses like rent or utilities or flexible expenses like food, but you do have control over your discretionary expenses. Keep every single one of your receipts, and make sure you are always aware of how much money is left in your budget to avoid over-spending.

Cut out unnecessary expenses

It may not be the easiest task to undertake, but everyday expenses add up more than you would think. Here are some items you’ll probably be able to live without:

  • Gym membership: The average gym membership is around $41/month, but can cost up to $200 depending on add-ons or better facilities. That sets you back $492-$2,400 a year! Take up jogging, join a local rec center, or check out fitness videos on YouTube to stay fit without breaking the bank.
  • Coffee: Hold up, I’m not suggesting you give up your daily caffeine boost for good! But it’s so much cheaper to just make your coffee at home, instead of hitting up Starbucks every day for a $4 latte (well, the average is about $2 for regular coffee). Assuming you only buy one coffee beverage per day, every day, you could save $400-$1400 depending on how elaborate your regular drink is.
  • Eating meals out: The idea behind this is similar to cutting out coffee. Instead of spending $10-$20 on lunch and/or any other meals (or having to resort to fast food), stop by the grocery store on Sunday afternoon and buy your own ingredients for the rest of the week. Meal planning isn’t as complicated as it sounds, and there are plenty of free online resources to help you with ideas. Bringing your own lunch to work could save you at least $500 a year!
  • Entertainment: Depending on how much you feel you really need to watch TV, some are able to let go of their $100/month cable plans in favor of an unlimited streaming service like Netflix that’s only about $9/month. Another way to save is to re-evaluate your cellphone bill. Do you really need to be paying for 900 voice minutes per month if you usually just text? Reduce your data plan and opt to use Wi-Fi instead.
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