5 Ways to Save for a Down Payment
In order to save for a down payment on a house, you need to set a goal or have an idea in mind about how much you want or need to put down to buy the house you want. It can be exact or a general estimate/goal you would like to work towards. You'll need your down payment percentage plus roughly 3% of the purchase price for closing costs.
Monthly Savings: A strategy that you may have used to save for other things, is to put a set amount aside each month. Your set amount will be determined by the size of your down payment and the timeline as to which you would like to purchase a home. You can manually or automatically move payments to a savings account. Sometimes it is easier to open a savings account just for your down payment so you can keep funds separate and they aren’t getting lost in what its use is for. A high yield savings account is a great option for this.
High Yield Savings: A high yield savings account is an awesome account to have because it accrues at a high interest rate. Free money! Roll a lump sum of money in a high yield savings account and let it grow into the down payment you need.
Side Hustle: If you have extra time to put towards a side hustle, get one! Use the income you make and make that your savings for your down payment. It will then free up your regularly monthly income to dedicate to bills, monthly expenses, etc. that you are already paying.
Raise or Bonus: If you receive a raise or get bonuses throughout the year or end of year, put those aside and save those to put towards your down payment.
Pay off Debt: Another strategy to help save for a down payment would be to pay off one debt or multiple and then use that extra cash each month towards a down payment instead.
