7 Simple Ways to Save For a Home Down Payment

7 Simple Ways to Save For a Home Down Payment

Whether you’re looking to buy a home or you’re saving up for next summer’s family vacation, learning how to save money will help you live a more comfortable lifestyle. Here are seven lifestyle changes that can enable you to save for a home down payment, or anything else you want to own.

Save for a Home Down Payment with 7 Lifestyle Changes

Pack Your Lunch

A typical lunch out, even a fast-food lunch, costs around $10-15 a day. So if you work 260 days a year, and you spend $12 a day, you’re spending $3,120 a year just for lunches. Packing your lunch with sandwiches and apples, will save you a considerable amount of money (and it’s probably healthier, too!) Let’s say that a loaf of bread is $5, lunch meat is $4, and apples are $5 for the week. You’re now spending $728 a year on lunches, saving you $2,392 a year. Imagine if you and your spouse packed lunches instead of dining out, you would save almost $5,000 a year as a household! Minimizing the number of times you eat out and putting that money aside to save for a home down payment instead could help you quickly grow your nest egg and buy a new home sooner.

Make Your Own Coffee

Similar to packing your lunch, a daily coffee eats into disposable income when you want to save for a home down payment. Say you’re spending an average of $5 at the local coffee shop. That means you’re spending $1,300 a year on coffee alone. If you invest in your own coffee maker you can save a ton of money. A large bag of coffee beans is around $20 and lasts a month if you’re drinking 1 cup of coffee a day. So instead of $1,300, you’re spending $240, saving you over $1,000 a year.

Cut Your Hair at Home

Though not for the feint of heart, investing in a $75 styling kit once, is paid back in around 3 trips to the hair stylist for a man, and in 1 trip to the stylist for a woman. Men get their hair cut around once a month, costing about $25 a trip. This adds up! This means men are spending $300 a year on their hair, and this doesn’t include if the man gets his hair cut twice a month. Women get their hair styled every 3 months or so, each time costing at least $75. So yearly women are also spending around $300. Once you invest in your own kit, you eliminate the haircut expense, thus saving your household $600 a year.

We realize this isn’t for everyone. If your hair style doesn’t make it practical to skip trips to the salon, consider adding an extra week in between appointments, or grooming your kids hair or your pets at home instead of at the salon (or groomers).

Pay in Cash

Paying in cash is a simple way to save money. With cash you are not tempted to impulse-buy since the money you have is right in front of you. You are also not as tempted to spend money you don’t have. Research shows that people spend 12-18% less when they use cash over credit cards. Additionally, if you are someone who makes a budget spreadsheet, you’re more likely to stick to the budget if the money you have is right in front of you. Sticking to a budget that doesn’t enable you to spend money on debit or credit cards can be the quickest way to save for a home or some other purchase.

Collect Coins

Once you start paying in cash you will have more coins (change).  Instead of spending that spare change, save for a home by putting your excess coins in a jar and saving them up. Make a rule that you can’t open the jar until it is full of coins, and then take it to the bank and deposit it into your home-savings account. You’ll be surprised how many dollars you’ll have saved up just by storing your coins in a jar.

Rethink Your Treats

While it’s very important that you treat yourself after a long day or a celebration of an event, treating yourself with expensive goods can add up fast. A recent study showed that 75 percent – 3 out of 4 – people treat themselves twice a week. A simple night out with friends can cost you $100, and if you’re doing this twice a week it can lead to $10,400 a year. Set a limit for yourself with the mindset that it’s OK to indulge yourself in treats, but cut back the frequency. Simply cutting your treats to once a week can save you over $5,000 a year.

Say bye to name brands

Sometimes store brand food tastes different than name brand foods, but most of the time, you can’t tell the difference. Next time you’re out shopping, opt for the store brand of soap before you reach for a Brand name. Doing this on your grocery trips can save you 33% of what you were going to spend. Being picky is OK for items that are important to you, but when you can’t tell the difference, go for the store brand.

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  1. […] property may get you a better refinance interest rate, and on a purchase, that means making a 20% down payment on your home. If you are not able or not willing to pay 20% you may still qualify for an FHA loan […]

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