After reading articles upon articles about how to save money for a down payment on your first home. I realized not a single article I read actually gave me any real ideas on how to save money. They all typically said reduce expense, increase income, and save. This is a little more difficult than they make it sound, especially if you recently graduated from college and you have student loan debt. So here are my top tips on how to save money for your first home.
- Open a 12 to 24 month CD with your financial institution of your choice. This will allow you to deposit your funds into an account that you cannot touch until the term is over. If your unable to do this, open a savings account and throw away your ATM/Debit card. This will be your down payment account.
- Starbucks rule – Every time you decide to drink a coffee at home or you get the $1 coffee from the gas station, transfer $5.00 to your down payment account. If you did this once a week, you would have saved $260.00 in one year.
- Tax Returns – Every year you receive a tax return, deposit it into your down payment account. The great thing about money, if it is out of sight, then it is out of mind. Tax returns are a great source of money for a down payments.
- Work Bonuses, Gifts, ETC. – Anytime you receive money unexpectedly, you should deposit those funds into your down payment account.
- Monthly payments that end. If your car payment is $225 a month and you paid your car note off today. Deposit the $225, you are now saving monthly into your down payment account.
You should be able to save enough money for a down payment in little to no time.