Saving enough money for a down payment can be tough, however some discipline along with a plan will help bring you closer to home-ownership. Here are some ideas to help you get started.
7 Budgeting Strategies When Saving for a Down Payment
Track every dollar Figure out specifically where your money goes on a monthly basis by keeping track of each and every item or service you purchase over 1 month. Take a look at credit card and bank statements to categorize the places you spend each dollar.
Rate every purchase Using the month of expenditures, rate each item or service you purchased as a “want” or a “need.” Set savings goals Utilizing your “wants” and “needs” list, determine where you can realistically cut spending. Use the budget to set monthly and yearly savings goals.
Set aside funds Create a separate savings account for your down payment. It’s not just easier to track, but blocking off the funds could make you think twice before dipping into those funds for something other than your future home.
Save automatically For anyone who is paid through direct deposit, chances are you can split your paychecks into more than one account. Set it up for regular deposits to be made into your new “down payment” savings account.
Save your tax refund The IRS estimates that more than 150 million tax returns are going to be filed this current year. Save your tax refund and apply it to your down payment.
Maximize your returns Once you have a bit of money saved, speak with a financial professional about places you can invest it to obtain a bigger return than you would by keeping it in your savings account – possibly a money market account or perhaps a certificate of deposit (CD).
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