Genius Ways to Save Money for a Down Payment
Let’s face it: saving for a home is a bit of an uphill battle. Sure you can cut out the lattes and bring your lunch from home, but with soaring rents, tight housing markets, and stagnant wages, it’s hard not to feel like the odds are stacked against you.
However, that doesn’t mean that it’s impossible. It just means you may have to get a little unconventional with your savings plan. Using the methods described below, future homeowners can save hundreds—if not thousands—annually, which should be enough to line your pockets for that down payment. Here’s how you can go rogue on your financials and break out some unexpected tricks to get the money you need.
Get Your Utility Expenses Lean and Green
Heating and cooling comprises almost half a home’s annual energy expenses, with water heating accounting for almost 20 percent. If you can reduce these costs, that’s more money for the down payment coffers. Often, these kinds of recommendations come in the form of costly up-front purchases, such as a more newer efficient air conditioner, or high performance washer and dryer. And while making these adjustments does save money, they’re not the only way to cut back on energy expenses. For instance, just lowering your water heater temperature to 120 degrees saves 4 to 22 percent annually on your electricity bills, and it costs absolutely nothing to make the change. Air conditioning filters are relatively inexpensive, and switching them out regularly makes a huge difference in HVAC performance and, in turn, energy efficiency. Running your ceiling fans uses a little bit of electricity, but it pales in comparison to the energy consumed by a central air conditioner. And running them jointly with the AC may allow you to turn the temperature on the thermostat up by as much as four degrees. Small changes like these may not seem like a lot, but once added together they’ll quickly grow your down payment stockpile.
Outsmart Your Impulses
Marketers are many things, but one thing you definitely couldn’t call them is dumb. Every big business—from grocery stores to the local dining chain—researches human psychology to trigger higher sales, sometimes against our own best interests. If you want to really save money, it’s worth analyzing your financial temptations, and exactly what makes you give in. For instance, grocery stores often use a “buy two, get one free deal” to lure you into thinking you’re saving a buck. The only problem? You only needed one box of cereal to begin with, and by the time you get to that third bag, it’s gone stale. Or they’ll put something on sale, like bagels, knowing you’ll then have to buy cream cheese (not on sale, of course) to go with it. Or maybe you’re browsing online, put something in your cart, and then change your mind. Don’t be surprised if a coupon for that online store shows up in your inbox the next day—it’s designed to try to sway you toward a buy. To avoid these kinds of purchases, read what’s on sale ahead of time (there are lots of great apps, like Ibotta and Grocery IQ that will help you with this), and plan your weekly menu around that. Unsubscribe from coupon mailing lists if it makes you buy something you don’t need. Learn what triggers your impulse purchases—your budget will thank you.
Challenge Yourself to One “Money-Free” Weekend a Month
If you’re anything like most people, it’s the little luxuries that really add up: the dinner and drinks out with friends one night, a movie and snacks the next. But who wants to stay home all the time watching TV? That’s why this idea is so genius. It takes the business of saving money and turns it into a little celebration. During the money-free weekend, you rent movies from the library instead of going out, walk around a local park instead of shopping, play a board game at home instead of grabbing dinner and drinks. Other cashless entertainment? Try out Pokemon Go or geocaching, drag the bikes or the rollerblades out of the garage, or finally work on that craft project you started but never finished. Or take the dog for a hike, make bread or cookies from scratch, or learn a new card game. The possibilities are endless, and you’ll come away from the weekend with a bunch of new experiences you never would have had if you spent money!
Learn Some Basic Repair Skills
We’re not necessarily advocating that you become a full-fledged mechanic here, but practicing a little self-reliance can save you some serious dough. Maybe it’s the T-shirt you mend instead of buying a new one, or the oil change you DIY in place of a costly visit to the dealership service center. Minor car maintenance—like replacing bulbs in your headlights and brake lights, refilling fluids, and installing new wipers—can save you hundreds on unnecessary repairs, and most can be learned by watching a video online. Meanwhile, learning to fix a leaky faucet, patch a hole in the wall, or relight a water heater pilot light can save lots in home repairs—and again, instructional videos for all these tasks can be found online. Not the handy type? Learn how to remove stains, mend clothes, or cook your food. Not only will you have some spare cash to sock away, you’ll also be learning valuable life skills that will help you a lot after you purchase your own home and have to take care of all the repairs yourself.
Get Smart With Your Credit Card Debt
Debt is one of the biggest budget drains out there. You certainly can’t save when you’re using all your spare cash to pay back high interest credit cards. One quick way to get rid of high-interest debts is to spring for a new card with a zero interest balance transfer offer, and try to pay off as much as you can before the offer expires. Just make sure the interest rate afterward isn’t higher than the one you’re paying now. Another option is to look for a personal loan that will do much of the same thing: allow you to consolidate your debts into one low-interest payment. Savvy credit card holders can also convince their providers to offer a lower rate. This maneuver is tricky, but those who master it can save untold amounts on credit card debt. To make it work, you have to be firm and authoritative; try it with this script and see how it goes. After all, it won’t hurt anything if they say no. Whatever you do, make sure you’re paying more than the minimum monthly payment—just paying the minimums could mean you take years to pay off the debt.
With that, we’ll leave you to get the ball rolling. After all, the sooner you get started saving, the sooner you’ll be waking up in your brand-new home!