For most Americans, a down payment is the only thing standing between renting and owning a home. Although it may seem like a daunting task to save enough to get out of the renting cycle, there are some tricks to saving money quickly. Here are a few:
Develop a budget & timeline.
Start by determining how much you’ll need for a down payment. Create a budget and calculate how much you can realistically save each month – that will help you gauge when you’ll be ready to transition from renter to homeowner.
Establish a separate savings account.
Set up a separate savings account exclusively for your down payment and make your monthly contributions automatic. By keeping this money separate, you’ll be less likely to tap into it when you’re tight on cash.
Shop around to reduce major monthly expenses.
It’s a good idea to check rates for your car insurance, renter’s insurance, health insurance, cable, Internet or cell phone plan. There may be deals or promotions available that allow you to save hundreds of dollars by adjusting your contracts.
Monitor your spending.
With online banking, keeping an eye on your spending is easier than ever. Track where most of your discretionary income is going. Identify areas where you could cut back (e.g. nice meals out, vacations, etc.) and instead put that money into savings.
Look into state and local home-buying programs.
Many states, counties and local governments operate programs for first-time home buyers. Some programs offer housing discounts, while others provide down payment loans or grants.