Saving For a Down Payment On a Home In Just 2 Years

Recently, Realty Times ran a great article on how to save for a home down payment. In today’s market, you usually need up to 10 percent of a home’s purchase price for a down payment. This means a $250,000 home could require $25,000 down plus closing costs. If you saved $1,040 a month for the next 24 months, you’d achieve that goal. On the surface, that may seem impossible—but it’s not. Make some short-term sacrifices now to save for a down payment on a house.

Give up that extra bedroom for the short term. If you rent in a premium location, consider moving to a less expensive area. It may take you a little longer to commute, but it won’t be for long. Reduce the amount you are paying in rent by $500, and you will be halfway to your monthly goal.

Take a Part-Time Job

Become a barista at your local coffee shop. Become a yoga instructor at your gym (maybe you can get the gym membership for free). Offer babysitting or pet-sitting services to friends and neighbors. Scour thrift stores and yard sales for great finds, and then sell the items on eBay. Find something you enjoy doing, and then find a way to earn a little money doing it in your spare time.

Cut Expenses

If you don’t have a budget, now is the time to create one. Examine each line item and ask yourself, “What can I do to reduce this amount?”

  • Insurance. Speak with your insurance agent and ask for a quote with several different deductibles. Raising your deductible on your car insurance can lower your premiums.
  • Cable and Internet. Survey your cable bill for charges you can eliminate. Most people don’t need 148 channels. Internet connection is free at the local library or coffee shop.
  • Cell Phone. Unlimited texting is a luxury, not a need. Reconsider your smartphone.
  • Dining Out. Cook dinner at home and prepare enough for tomorrow’s lunch. Make your morning coffee at home. Don’t eat out as much.
  • Gym Membership. Take up a sport. Running, racquetball, tennis and swimming are aerobic and strength-building activities you can do for free.