If you’re wanting to buy a home for the first time, it can be very intimidating to come up with a down payment. Modern financial experts say that you shouldn’t put any less than 20 percent of the total cost toward your home loan as a down payment. But when you’re looking at the prices of homes, 20 percent can be a lot of money. For the average person, this amount of money won’t just accumulate on its own: you’ve got to put in the effort to save. So to help you accomplish this, here are three budgeting tips to help you save for a home.
Budget Every Penny You Bring In
The biggest—and hardest—part of having a budget is actually sticking to it each day or week or month. Some great advice to help you in doing this, according to DaveRamsey.com, is to budget every penny that you make each week or month. When all of your money is assigned to go somewhere, be it for bills or debt or savings, you have a much better chance of that money actually going there and being used for that purpose. When you don’t budget every cent you have, you run the risk of wasting some of that money simply because you haven’t decided the optimal way to use it. But by budgeting down to zero, you’ll ensure that you’re saving the maximum amount of money that you have within your budget.
Cut Down On Food Costs
For most things that you spend money on each month, there will be a pretty steady cost associated with it, like your rent or mortgage, your car payment, insurance costs, utilities and more. But for things like food, what your spending can swing drastically if you’re not careful. Because of this, NerdWallet.com recommends cutting down on your food costs by eating out less and planning your meals before you hit the grocery store. The money you spend when eating out doesn’t go nearly as far as when you spend that money at the grocery store, so make fast food or restaurant visits few and far between. Additionally, when you plan what you’ll buy at the store before you get there, you’re less likely to spend your money on food you don’t need, shouldn’t eat, or can’t use to make a meal.
Use Cash For Everything But Debt Payments
While it makes sense to pay for some things using an automatic payment or a credit or debit card, Miriam Caldwell, a contributor to The Balance, suggests that you use cash for all other daily purchases. By doing this, you’ll be more likely to not overspend and stick within your budget.
If you’re wanting to save money so you can afford a home, consider using the tips mentioned above to help you budget for this purpose.