It’s time. You’ve rented long enough, and you’re ready to become a homeowner. But saving for a down payment is easier said than done. Here are five creative ways you can boost your savings in order to attain that coveted 20 percent down payment.
1. Find affordable alternatives
Aside from being smart about your current living situation, many of the things you’re already paying for can be substituted or outsourced more affordably. For example, drop your gym membership in favor of working out at home. Or, lose the cable subscription and sign up for Netflix.
And for all the programming Netflix can’t provide, there are bars and friends’ houses that are tuning into the same stuff. So check them out. After all, don’t we watch what we watch so that we can talk it about with someone else?
2. Turn your hobbies into side gigs
No matter how mundane or insignificant your talents seem, there are other people out there who don’t have those talents — and they might be willing to pay you for your skills.
If you’re good at making things, look into selling your wares on Etsy. Woodworking, knitting, sewing, and graphic design are all in demand.
Check out Taskrabbit, a site that hires you out to do household chores and errands for people in your community. Things like assembling Ikea furniture, shopping, pet sitting, and more can yield a surprising amount of money to add to your down payment fund. Ebay, too, is a popular source of cash for many people.
3. Make it competitive
Saving money is hard, so why not make it fun and competitive?
If you’re planning to buy with your significant other, competing to see who can save more benefits both of you. But single buyers can benefit from competition too. Find a friend who is in a similar position and create a savings race to motivate both of you to save more.
4. Reward yourself
Break your savings goal down into manageable chunks, and think of a low-cost reward for yourself when you reach a milestone.
Treat yourself to a dinner, or do something free like going for a hike in your favorite wildlife preserve.
5. Turn your savings into more savings
Once your down payment fund starts to grow, it may be possible to turn that money into even more money through careful investing.
Consider high-yield savings accounts, certificates of deposit, peer-to-peer lending and mutual funds. Be sure to get solid advice about whether your timeline is appropriate for different investment options, and carefully weigh the risks.
If you’re unsure, use a high-yield savings account, which is one of the most conservative choices because they’re insured by the federal government.
Saving for a down payment is challenging, but it can be fun, too. Get creative, realize that it’s not forever, and you’ll be walking in the front door of your own home before you know it.