Buying a house can be such an incredible experience. When we’re finally able to find the perfect place to call home, we get a sense of comfort and belonging that’s indescribable. Our home protects us, helps us plant our family roots and allows us to create memories that will last a lifetime.
Before we can take the plunge and buy our new home, we need the money to make it happen. That all starts with a down payment.
And for a lot of us, that large amount of money is not always sitting in our bank account readily available for purchase time. With the majority of our country living paycheck to paycheck, coming up with the money for a down payment can feel really difficult – if not impossible.
To support us in buying our dream home, here are seven ways that we can find “new money” for our down payment.
Don’t Spend Your Tax Refund
Not everyone gets a sizeable tax refund based on how they file, but if you do, consider putting it in a savings account for your future home down payment. With the average tax refund hovering around $2,800, this could be a great starting point for your new home fund.
It may be tempting to spend this sizeable sum on a relaxing vacation or another luxury purchase. Hey, we’re human, right?! But if you’re able to hold yourself back and think about your new future home instead of some fun in the sun, your future self will thank you.
Save Your Bonus
There are plenty of smart things to do with a bonus. You could pay down debt, invest for the future and save for a down payment on your next home.
There is a trick to this one though – you have to pretend the bonus isn’t going to come and therefore, you won’t plan to spend it.
A lot of this down payment savings game is psychological. When you’re in control of your money – instead of the other way around – you win.
Ask For A Raise At Work
Let’s say bonuses don’t really happen where you work. That’s okay. There are other routes to increase your income with your employer. For example, you could ask for a raise.
Now there are smart ways to ask for a raise, and then … there are not. Don’t go demanding more money just because you want it. You should be exceeding career expectations and having continuous dialogue with your supervisor about your goals at work. If your work and progress is not measurable, that can make asking for a raise a lot harder.
If you feel like you’ve been crushing it at work and your supervisor calls you out as a top contributor, there’s no harm in asking for what you feel you deserve. Be sure to check out sites like Glassdoor to learn more about typical salary range potential. The process could be enlightening and help you better understand the growth path for your future home down payment.
Develop A Side Hustle
Perhaps the potential for income growth in your full-time job is limited or you’ve already tapped those resources and you’re looking for more ways to save for your down payment. Well, look no further than the side hustle!
Side hustles can be work done through the gig economy (Uber, Lyft and DoorDash), taking freelance jobs (writing, graphic design and website management) or by turning your hobby into a moneymaking small business. If you have extra hours and the drive to grow your savings, developing a side hustle may be for you.
Just be careful not to burn yourself out. If you’re working during the day, at night and on the weekends, you won’t have much time to enjoy that new home of yours. Be sure to find a savings rate and time frame that works well for your lifestyle and your long-term goals.
Clean House And Sell Stuff
There are only so many hours in the day. Making more money at work or outside of work may be difficult for you. A great place to start is in your current place of living.
Set aside an evening to walk around your house and find 10 things that you can sell on Craigslist or Facebook Marketplace. These are things that you don’t use or things that don’t bring you joy anymore. Some ideas may include:
- Baby gear
- Kid’s clothes
- Video Games/Movies
This evening of cleaning, purging and selling could very well net you $500 or more. And hey, even if it doesn’t, you’ll definitely have a much cleaner house!
Shop Around For Competitive Insurance Coverage
Every year or so, it’s smart to reanalyze your insurance coverage. Your personal living, driving and financial situation may change over time and making sure you have the proper coverage is key.
But you also want to make sure your current insurance provider is giving you the best coverage for the lowest price possible. Quite often, insurance providers slowly increase their prices over time and before we know it, we’re paying a lot more than we originally committed to.
Shop around to other competing insurance providers for policies like home, auto and umbrella. A few phone calls could save you thousands of dollars per year. This four-figure savings expedition could be a nice pile of cash added to your future home down payment reserves.
Trim Your Food Bill
One of the top three areas where we spend our money is food. Eating out for dinner, swinging by the drive-thru and our typical grocery shopping can take up a big portion of our monthly budgets.
While we’re saving up for our next home, try to keep eating out at restaurants to a minimum. Those high-priced bills can steal a lot of our savings potential.
Additionally, there are plenty of hacks to save money at the grocery store. Some of my personal favorites are the following:
- Shopping with a list
- Limiting trips to once per week
- Switching to a low-cost grocery store like ALDI
- Buying fruit and veggies that are in season
- Cutting back on pre-packaged foods
Diligence and a little preparation with our food plans can help us save money and stay healthy at the same time. This way, you’ll be healthy and wealthy in that future home of yours!
Remember, everyone’s financial situation is different and it’s best to speak with a licensed financial expert or advisor before making any major financial decisions.
What strategies are you using to save for your home down payment? Please let us know in the comments below.
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