Saving For a Down Payment? 10 Tips That Really Work!

Everyone daydreams of buying their own place, but with the rising cost of homeownership, saving up enough money for a down payment on even a small place can seem like an impossible task.

But with careful planning and a little creativity, you can have enough money saved for a down payment sooner than you ever expected.

Separate Bank Account

Open a separate bank account and only put money in it for your down payment. Don’t touch the money in that account until you’re ready to buy your home. Having a separate account will help you keep track of your savings, and watching the balance grow will help you stay motivated to put every spare dollar toward your down payment.

Brown Bags and Travel Mugs

not only does homemade food taste better, but it can save you big money

It’s easy to spend $20 a day on coffee and lunch if you eat out during the workweek. By brown-bagging your lunch and using a travel mug to bring home brew coffee, that $20 per week will contribute more than a thousand dollars to your new home fund in a year.

Netflix, Newspapers, and Other Subscriptions

Do you have a slew of magazine subscriptions collecting dust on your coffee table? If you’re saving for a down payment, it’s time to cancel these subscriptions. Canceling your cable and opting to watch television shows or movies over the internet can also save you a small fortune.

Unexpected Money

Did you get a holiday bonus from work that you weren’t expecting? Or maybe win a few hundred dollars the last time you played bingo? Or a lucky lotto ticket?

Deposit any unexpected money into your bank account. And if you’re lucky enough to come into a sizeable windfall, such as an inheritance, consider investing your funds into a short-term, high-interest account for additional earnings, all going towards your new home.

Family and Friends

If you find yourself close to the required amount, but still just a little short, consider checking in with family and friends who may be able to help with a short-term, low- or no-interest loan. Pay them off first, and be sure to invite them to see the house before anyone else.

Reduce Retirement Contributions Temporarily

For a short period, reducing your retirement contributions can help you save for your down payment. Contribute less to your retirement only for the duration that you’re actively saving. Once you have the down payment covered, don’t forget to increase your retirement contributions once again!

eBay, Etsy, and Kijiji, Oh My!

turning your hobby into a side hustle can bring in extra cash

Saving for a down payment means you’ll have a move in your future. And that’s an ideal opportunity to evaluate your possessions and declutter. Haven’t used that sewing machine in years? Have a treadmill you always meant to unpack but never got around to setting up? Sell them online and add money to your growing bank account.

Consider Working a Second Job

If you’re able, taking on a second, a part-time job can help you increase your savings for a down payment. Look for ways to earn money for something you already do, from a hobby or pastime. For example, do you love walking your dog? Could you walk a second dog at the same time? If so, you could add another $15 – $20 per hour just by walking around your neighborhood with your pup and a canine companion.

Gift Money

Do you get money from family or friends when your birthday or the holidays come around? These little gifts can give your savings account a fantastic boost. Send a thank-you note and let your family or friends know that you’ve put the money toward your new home.

Deposit Your Tax Refund

Getting a tax refund always seems to feel like you’re getting free money, and you may be tempted to spend it on a vacation or other nice, but unnecessary, treat. But regardless of whether or not your tax return is thousands of dollars or just a few hundred, put it toward your dream of owning a home.

It may take you a couple of years to save up enough money for your down payment, but by following these tips, you’ll be surprised how easy it is.

5 Steps to Raising Money-Smart Kids

Money-smart adults don’t always start out as money-smart kids.  

How many of us think back to our childhood and wish we had been taught about money? Too many young adults graduate from college without the slightest idea of how to manage their money or their debt. Most can’t even balance their bank account. 

But now that you’re ‘all grown up’ and mastered money & debt, you want to pass that knowledge on to your kids. And these five steps will have you raising frugal, money-smart kids who become frugal, money-smart adults in no time.

Bring Your Children To The Bank With You

Whenever you go to the bank to deposit money or pay bills, bring the children along. You’ll be giving them a real-life illustration of what it means to “save money.” For extra impact, share with your kids how good it is to save for a “rainy day.” And don’t forget to let them know that saving makes you feel happy. Children learn from us, even when we don’t realize it. 

Use a Mason Jar Instead of a Piggy Bank

Seeing their money increase or decrease can be a powerful tool for raising money-smart kids

We might reflect fondly on our youth, putting pennies in a piggy bank, but you’ll do your child greater benefit by using a clear glass mason jar for saving. A see-through jar gives your child a powerful visual of their money. Every time they make a deposit, they can see the difference. Yesterday they might have had two quarters, and today they have two quarters and three nickels. If they spend a quarter, it’s easier for them to understand they have less. 

Good Things Are Worth The Wait 

The next time you feel like making an impulse purchase tell your child you plan on waiting for a few days to be extra sure you want it. Show your children that even though you may want something today, you may not feel the same need tomorrow. Curbing impulse purchasing in your children is something that will benefit them throughout their lives.

Give An Allowance

An allowance is one of the best things you can do for your children if you want to teach them to be money-smart. When your child wants something, have them purchase it with their own money. When that money is gone, they will soon understand what it means to have no more money until the next allowance comes around. And by reducing your child’s need to ask you for money all the time, you help to develop their individual sense of financial responsibility.

Image by wei zhu

Cash Versus Credit

Rather than making a big purchase on plastic, tell your children that although you really want this item, you don’t have enough money for it right now. Let them in on your plan to save money towards the purchase of the item. When the time comes, make the purchase together. You’ll be showing your children that credit doesn’t mean buying what you can’t afford.

Teaching children about money is not always easy, but it’s always worthwhile. Remember, you aren’t raising children, you’re raising adults; money-smart adults. And that’s worth the investment!