Paying the down payment is an important and crucial part of any installment-based purchase, more so when it is for a home or a property. And saving for this initial payment is easier said than done, too. The Simple Dollar contributor Peter Miller suggests some ways on how to save for that down payment.
1. Open a Savings Account
This is a very basic step. You may open a savings account online or, for convenience, open one at the same bank or credit union where you have your checking account.
2. Start a Budget
This can be done through the use of a spreadsheet where you can easily see your monthly gross income and then subtract your tax, other costs from your pay stub, together with your other monthly expenses such as rent, utilities, loans, care payment, and credit card bills. This way you can see your net income.
3. Check Interest Rates
Check your credit bills and account the interest rates. By making full and prompt payments, you may be entitled to a lower rate which can add to your savings. Virginia C. McGuire, who writes blogs for Trulia, shares additional creative ways by which one can save.
4. Find Affordable Alternatives
She says other things you are already paying for can be replaced or outsourced more affordably. For example, you can drop your gym membership in favor of working out at home. You can also lose the cable subscription and sign up for Netflix instead.
5. Turn Your Hobbies into Side Gigs
Aside from having fun, your hobby can be a good source of income. In demand are knitting, graphic design, sewing and woodworking. Or you may also do some household chores, errands and other jobs like assembling, pet-sitting and shopping.
6. Reward Yourself
You may divide your savings goal into manageable chunks and treat yourself to low-cost rewards, such as dinner or a hike in a favorite wildlife preserve, whenever you reach a milestone.
7. Turn Your Savings into More Savings
As soon as your savings for that down payment starts to grow, you may turn in more money by carefully investing, either on a high-yield savings account, mutual funds, certificates of deposit, or peer-to-peer lending.