5 Ways to Boost Your Down Payment Savings

Borrowing, Home Purchase Loan

By Andrea Woroch

More Americans than ever are buying homes. In fact, a report from Zillow estimates 6.9 million existing home sales this year, the most since 2005, and projects a nearly 22% one-year gain in sales, the largest jump since the early 1980s.

If you are among the millions hunting for a home, it’s important to get a few money items in order first. One of the most important financial steps in the home buying process is saving for a down payment. However, considering 72% of prospective homebuyers said their home savings plan was disrupted by the pandemic, according to a recent report from ImproveNet, getting back on track may feel impossible.

Whether you’ve been dreaming of buying a home for years or just started thinking about it, don’t wait to start saving. Here are five budgeting tricks to help you begin building a down payment now.

1. Lower monthly bills.

Even if you feel like you’re living lean, there’s a possibility you’re paying more for monthly bills than you realize. From cancelling unused subscriptions to negotiating with current service providers like cable or Internet to shopping around for car insurance for a more competitive rate, spending time and doing a little research could free up extra cash, which can be used to boost your home down payment savings. You can even leverage a bill negotiating service like Trim to help you find extra savings in your budget.

2. Limit luxury services.

There’s nothing wrong with splurging on yourself from time to time. After all, you work hard for your money and should enjoy it. However, when working on a major goal like buying a home, it’s time to cut back on the things you don’t really need. Begin by looking at services you could do yourself, from manicure and pedicures to washing your car, you could find lots of extra money to put towards savings by DIYing. Remember, you can always add these services back when you reach your down payment goal!

3. Dodge impulse buys.

Americans spend an average of $182.98 a month on impulse purchases, according to a survey from SlickDeals. With so many people shopping online these days and more retailers offering fast and free shipping on everything from groceries to clothing, it’s easier than ever to buy things you really don’t need with a single tap of the finger or click of the mouse. Though an occasional splurge won’t hurt your savings goal, regularly giving in to impulse buys will derail your home savings progress. Putting up some digital barriers may help. For instance, delete payment information saved in online accounts, turn off deal notifications that pop up on your phone, and unsubscribe from retailer newsletters to avoid those costly temptations.

4. Put cash back to work.

Even in your effort to reduce discretionary purchases, there are things you need to buy no matter what. However, you can turn these essential purchases into extra savings by looking for ways to earn cash back. For instance, digital tools like Cently provide you with cash back when you’re shopping online and Fetch Rewards gives you cash back on grocery purchases by scanning pictures of your receipts. It’s also important to ensure you’re using the right credit card on every purchase. Use a credit card matching app like Gigapoints to help you find a credit card that will reward you with the most cash back for the types of purchases you make the most. Then, put those cash back rewards to work directly to your down payment savings fund. If you want more credit, check out MoneyTips’ list of credit card offers.

5. Pick up a side gig.

If working overtime or getting a raise are out of the question, consider how you can use your free time to make some extra cash. Every additional dollar you earn can put you that much closer to reaching your down payment goal faster. Plus, there are a variety of side hustles you can do in your spare time that are fun and easy to do. For instance, you can earn up to $1,000 a month by dog sitting or walking through sites like Rover.com. If you enjoy browsing the Internet, companies like Wonder will pay you to conduct online research. Meanwhile Slice the Pie will pay you to review music.

If you are interested in refinancing your home loan, visit the MoneyTips Mortgage Planner

Photo Sandy Millar on Unsplash

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