Experts suggest that you put 20% down when buying a home. This eliminates PMI (private mortgage insurance), lowers your monthly payment, and shows the seller that you mean business. If the home you're interested in is $200,000, that means putting $40,000 down. Plus, there are closing costs and other "hidden expenses" to consider. But, if you don't have 20% to put down, that's OK, too. Several programs allow for as little as 3-3.5% down. VA loans require no money down. Saving up for a downpayment doesn't have to be a struggle. And, if you have everything you need to purchase a property, it would be a good idea to have an easily accessible emergency fund set aside. Implement these simple tips and tricks to save money for your next Tucson home purchase.
How to Save Money for Your Next Home Purchase
Create a Budget
It's one thing to create a budget. It's another to stick to it. Take a moment to sit down and take an honest look at your finances. Write down your monthly expenses (groceries, rent/mortgage payment, credit card payments, student loans, car loans/leases, entertainment, etc.). Then, compare that total to your monthly household income. Cut unnecessary expenses wherever possible. But, instead of spending the difference on something else, set that money aside in a dedicated savings account.
You don't have to live like a pauper to save money if you don't want to. Take leftovers to work four out of five days a week. Same goes for your morning latte. Grab a cup to go from home at least four out of the five days a week. The money you used to spend on your daily meal and coffee runs can go into the savings account. Go out to lunch on Saturday or breakfast on Sunday instead of a heavier and more expensive dinner. Stash those savings in your account as well. As your savings grow, you'll find yourself becoming more motivated to save wherever else you can, too.
Pay Yourself First
Most employers offer an automatic deposit for your paycheck. Request that a certain amount per paycheck is deposited into your savings account. Whether it's a specific dollar amount ($100) or a percentage (10%), anything you save helps your downpayment or emergency fund grow. Studies show that you are less likely to spend that money if you never see it to begin with.
Find A Second Source of Income
If you really want to save money quickly, you might want to consider finding a second job. Love to take pictures? Hire yourself out for birthday parties, weddings, bar mitzvahs, and any other special occasion. Do some babysitting for friends over the weekend. Find a part-time job. All money made from these side gigs can be deposited directly into your savings account.
Take a Breath Before Buying Anything
You'd love to buy a new car. Maybe your refrigerator has seen better days. That air fryer on QVC would be great for your kitchen. Stop! Take a breath. Impose a 24-48 hour waiting period before you actually pull the trigger on these types of purchases. Oftentimes, you'll find that you didn't really need it in the first place. It was an impulse. You can wait. Remember: the more you spend, the less money you'll be able to save for your Tucson home purchase. Always keep the bigger picture in focus when looking at little things to buy.
Make Savings Into a Game
Do you and/or your significant other have trouble saving money? Do you have a friend who would like to save some money, too? Think about starting up a savings challenge. Set a time period for the challenge (one week or one month, for example). The person who saves the least amount of money in that time frame has to do the household chores or must watch the kids while the other goes out window shopping, to the movies or simply enjoys some "me" time. Make it fun. Healthy competition helps drive your savings impulse. Then, everybody wins.
Rebecca Schulte, Schulte Real Estate Group, Your Source for Tucson Real Estate