Ways to Save for a Down Payment

Spring is traditionally one of the busiest times of year for home buying. With uncertainty thanks to the global pandemic, normal has been upended leaving many wondering if now is a good time to buy or sell.  As a realtor living in the Four Corners area I can tell you that after a slower than normal month of April, things have picked back up in May with very little change to value which makes our area a very strong area to buy and invest in. Mortgage rates for qualified buyers are still at historic lows.

If there is one thing I learned from this pandemic it is that I can do better when it comes to saving money for my financial goals.  If one of your goals is purchasing a home or investment property soon here are some tips on saving money for a down payment.

Lost and Found Money

MissingMoney.com is a website that helps you search for unclaimed property that is held in state treasury departments.  My husband and I found a couple of bucks that we had overpaid in tolls and an old childhood bank account using this site.  We had to fill out a couple of forms to prove who we were and then a check was sent in the mail.

Increase Your Tax Withholdings

If you are like many Americans and just can’t seem to set aside a little savings each month for an emergency fund, increase the amount of your tax withholdings each month.  Doing this will generally result in a larger tax refund when you do your taxes.

Use your HSA as a Forced Savings Account

Medical expenses add up fast.  If your employer offers a Heath Savings Account (HSA) I strongly advise you to take advantage of this benefit. We are very fortunate that my husband’s employer offers this, and every year we add the maximum that we are allowed to contribute. For the most part we don’t use the money in this account when out of pocket medical expenses arise.  If we ever had a financial emergency though, we have a whole folder of receipts that we would be able to use for reimbursement.

Credit Card Points

If you can, get a credit card that offers points that can be converted to cash.  Add that cash back to your savings account.  Just make sure you aren’t spending more than what you can pay off each month so that you aren’t paying interest.

Saving Money One Expense at a Time

Review your transactions each month and pick one that you would be willing to eliminate for a month.  For example, if you are purchasing a coffee every morning consider making your own at home and add that daily savings to your savings account.  Next month, pick another “low” importance expense such as dining out and reduce that.  Continue to challenge yourself to cut out a new expense every month and watch your savings add up.

Online Challenge

Consider joining a “no spend” challenge on social media and recommend it to others in your social circle.  Sometimes it helps when you have a group of likeminded people keeping you in check and holding you accountable for your actions.

Less is More, Sell and Save

A lot of people have used this extra time at home to clean out clutter.  Use places like Facebook Marketplace, Ebay, Craigslist, etc. to sell your unnecessary items.  Add this extra money to your savings account.  If it seems too overwhelming to sell it all at once, commit to selling an item a month and continually contribute to your fund.

Get Paid for Your Opinions

There are many survey companies out there that are willing to pay you for your opinion.  I find it best to multitask while watching TV and complete these surveys.  Many will pay you in points that you can either redeem for a check or gift cards.  Some of the more reputable companies that I’ve had luck with are Amerispeak, Opinion Outpost, and e-Rewards.

Get Cash Back for Things you Already Buy

I am obsessed with cash back sites and apps. They require very little time and energy and I can easily add the quarterly cash back checks to my savings account. I enjoy the convenience of shopping online and before I make any purchase I check out my favorite cash back site Rakuten.  A couple of quick clicks and I’m earning money on items I was already planning to purchase. Phone apps like Ibotta, Checkout 51, Saving Star, and Fetch Rewards provide cash back for items you purchase instore by selecting offers in advance and uploading your receipt after purchase. Combining offers in these apps with coupons to maximize your rewards.

It doesn’t cost a thing to start saving money. Challenge yourself to try out a tip or two and watch your savings grow.  After that, start thinking about your dream home, but understand you don’t necessarily have to wait until you have 20% down. Call me today if you’d like to hear how it is possible to buy a home with less than 20% down.