There are a lot of good and fantastic ways to save for a big purchase like a home, but I have compiled a list of 8 great ways people can use to save for a house. Although the tips hereunder are for saving for a house, a big number of them can be applied to save for a car, a vacation, an RV, saving for your retirement, paying off debts or any other purpose.
Many people find that the moment they have realized their first objective, these methods assist them to realize their other financial objectives as well. So they keep on helping them. It all relies on how dedicated you are to achieve your set financial goals. Here under are the tips.
8 Ways to Save a Down Payment for a Big Purchase like a Home
You must prioritize
Saving for a large and big purchase, like a house, is all about your priorities. Do you take expensive vacations, go out to eat every time, drive brand new vehicles and buy the latest stuff? Or are you ready and willing to tighten the belt and save for a home? It all depends on you. Which is important than the other?
If saving for a house is part of your top priorities, then try to outline other personal expenditures you can cut back to put more money into the saving account. A budget can help you. If you have not put together one, this should be your start.
Get rid of extra Car
If you are married and have more than one car, consider selling one. This can save the family thousands of dollars every year. Moving closer to where your spouse works can be a greater idea. You could consider taking transit, walking, cycling or carpooling. If this works, you can save payment of one car every month, maintenance, gas, and insurance. Try to bank all this cash if you can.
Look for cheaper way to do things
This is the strategy for smart people to start saving money. They make a life of identifying more inexpensive means of doings their things without unnecessarily diminishing their lifestyle and fun. Below are some great examples:
- Do you purchase many latest books? Try the Library. Library has zillions of reading materials you can borrow for free.
- Do you eat in hotels a lot? Look for cheaper restaurants you would like or eat out less.
- Do you go to watch movies out a lot? Try sticking with cables or renting.
- Do you purchase a lot of brand new clothes? You can try to stick with your existing wardrobe for a little more time or selectively buy clothes that coordinate with you current wardrobe.
- Do you tour expensive places? Try less expensive vacations or nearer to your home
- Do you use a lot of money on your interests and hobbies? Try to find other hobbies that less expensive (at least for a while) or try to spend less.
- Do you purchase a lot of new music? Try borrow music from the library, listen to radio more or use a card to monitor how much you download.
If you work some of the above changes into your lifestyle, you will save money. Avoid using it on something else. You may consider cheaper alternatives available.
Clear all your credit cards debts
Saving can’t work if you’re paying interests to other people. The very first thing you need to do is clear all these debts. Clear the smallest high-interest debt first. You can then use a minimum payment of the debt to pay off the next small debt with the high-interest rate. This is best and fastest ways to clear your debts.
Save more from job
When you a raise from at your work, take the extra money and keep it in a savings account. It may be little but will add up over time. Also try saving extra sales commissions, bonuses or tax refunds.
Use Savings Account that is Tax-Free
To save your down payment money in a tax-free savings account is a great step to saving for a big purchase. The money can add up in this account. You will not pay income tax. It is also important to contact your advisor or financial planner.
See if your city or home area has a Program for New Homebuyers
Time to time cities have programs where first-time homebuyers are provided with interest-free loans for their home down payment. Such programs are meant to make it easier for new home buyers to get a home in expensive places or redevelop struggling part of the city. You can check the specific requirements of the programs offered in your city. The cash is paid interest-free after a period.
Borrow from your retirement saving
This is the last resort and I strictly advise readers to not borrow from your retirement account, unless there’s a dire need. Retirement saving account can provide you with a quick solution to your monetary need. Do remember to replenish the fund faster if you take a loan out.