Put More Money Toward Your Downpayment Each Month

Posted by Janis Penick on Monday, April 22nd, 2019 at 7:52am.

Saving for a downpaymentIf you are in the process of saving money to buy your first Bastrop home, you may feel like you will never have enough money for your downpayment. Depending on how much you are trying to save, it may take years to get enough but there are some things you can do to help expedite the process. Here are tips that will help you get into the mindset of saving money:

Cut Your Current Living Expenses as Much as You Can

Where are you currently living? Evaluate your current situation to determine if there are any areas that you have room to cut. Could you move in with a family member rent free or for a much lower amount than you are currently paying? Could you find a roommate to share your expenses with? Even if you answered no to the first two questions, I am sure there is something you can cut expenses from. Do you have cable you can live without, keep your thermostat so low in the summer you need a sweater or haven’t shopped your insurance in years? Go through each item from your monthly budget and really think about what is absolutely necessary and what you can live without then stash the extra cash towards your downpayment.

Do you have any “habits” that have gotten out of hand?

It’s really easy to get in the habit of grabbing your daily coffee from the coffee shop, eating lunch out every day or picking up take out at the end of the day. Just one of these habits can quickly add up to thousands a year and if you have several expensive habits, you could be throwing away tens of thousands of dollars a year. Set limits on your splurges such as a coffee run on Fridays, lunch with a coworker once a week and whatever else you can to allow yourself a little enjoyment without breaking the budget.

Trim the Expenses

If you sat down right now, you could probably think of five to eight things you spend money on that you really don’t need, or even use regularly. What about that gym membership you’ve used once in the last six months? Magazines that go unread? Buying the same books you can get from the library for free? Throwing out spoiled food from the refrigerator each week?  These are all things that can cost you thousands of dollars each year and are slowing your progress toward becoming a homeowner.

Learn to Budget

I know, budgeting isn’t exactly the most fun thing to do. But if you routinely write down how much you spend, and what you’re spending money on, you’ll know where your money is going and where you can cut corners. It’s hard to determine where your money is going until you see it in front of you. Once you write it down, you will likely be shocked by what you are spending and find some areas to cut.

Pay Down Credit Card Debt

Do you have several credit cards with a balance? If you’re unsure of which card or account to pay off first, follow Dave Ramsey’s snowball method to get your credit card debt (or any other debt) paid off faster then you can allocate those extra funds toward your downpayment and save tons of money on interest each month without the debt.

Make More Money?

Let’s face it. All of this would be easier if you made more money. Don’t discount that idea. In many cases, it may be possible. Do you have time for a second job, freelance work or have a hobby that could make you some extra money? Also, if you have items you don’t need or want, try selling them instead of donating them to make some extra money. If you are fortunate enough to get a raise during this time, immediately allocate the extra funds to your savings each month so you aren’t tempted to do something else with them.

Saving for a house isn’t easy but the pride you will feel when you accomplish something so big will be much greater than the sacrifices you made to get there. If you are ready to talk to a mortgage lender so you can determine exactly how much money you need to save, contact us and we will put you in touch with an expert.

The Janis Penick Team

RE/MAX Bastrop Area
Serving Bastrop, Cedar Creek and Smithville

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