When you’re young, saving for your first home down payment can seem tremendously overwhelming. Buying a home that costs $100,000 means saving $20,000 if you want to put 20 percent down—and the average home price in the U.S. was $259,000 in September 2014.
You might find yourself wondering what you could possibly do to make that money appear. Since planting a money tree probably won’t get you far, Movoto Real Estate has some creative ways to save for that down payment.
1. Designate A Period Of Time For No Spending
Challenge yourself to not spend any money for a week, a weekend, or even a month. Of course, you’ll need to spend money on necessities like rent, transportation to work, and other bills. A “no spend” period of time means not spending on discretionary things, like meals out and entertainment.
Not spending money doesn’t have to mean sitting around staring at the walls for a week or weekend. Plan ahead by thinking of what activities you can do for free.
- Look up a few recipes you’ve been wanting to try for your home-cooked meals
- Have a board game night or movie night
- Go for a day hike
- Plan on an all-day reading marathon of your favorite books
- Take a walking tour of your own city
With the budget surplus you create from not spending, add it directly to your savings. Transfer what you saved to your fund for the down payment on your home.
2. Use A “Challenge Everything” Mentality
J. Money over at Budgets Are Sexy decided to challenge every monthly expense he has in order to save more money. You can, too!
Go through your expenses, line by line, and see where you can save money or cut an expense all together. Some people are fine ditching cable or their gym membership, and others might discover that they’re being charged for a service they stopped using months ago.
Approach this with the mindset of saving money, no matter what. You want to make that down payment possible? Challenge all of your expenses daily.
3. Have A Garage Sale
Start fresh in the house you’re saving for by selling things you no longer need.
Go through all of your storage spaces and get organized. Figure out what you can sell and what you want to keep—but only keep what you’ve actually used within the past six to 12 months. When pricing big ticket items, do some research online to ensure you’re asking for the best price.
If something doesn’t sell at a garage sale, make sure to try eBay or Craigslist before going the donation route. All proceeds should be stashed away.
4. Make Money With A Creative Hobby
Do you prefer making gifts for others over buying them? Do you enjoy painting or creating other types of art? You can use your creativity to make products to sell on Etsy or Fiverr.
If your community holds craft fairs around the year, take part and see how much you can sell. It’s a great way to get the word out about your products.
Online marketplaces aren’t limited to traditional artists. Any activity that you enjoy in your spare time can make you a few extra bucks. Browse through Fiverr to see what people are currently selling to get ideas if you’re not sure where to start. Other options include oDesk, Freelancer, or TaskRabbit.
5. Utilize Credit Card Rewards
This is only for those that are responsible with credit, and have no credit card debt. If you use a cash back rewards card, then you’re already reaping the benefits of getting paid to shop.
This requires no effort on your part, other than making sure you select a card that will give you the most cash back for your spending. Put everyday items like groceries, gas, and utilities on the cards to rack up points and be sure to use the cash you have on hand to wipe out the balance each month.
6. Deplete Your Pantry And Freezer
Groceries can often be budget busters if you don’t shop carefully. Keep your spending low by focusing on eating what you already have in stock. You might have to get creative with some meals, but that’s the fun part.
This is a good habit to get into regardless of your financial situation. Americans throw away 40 percent of the food they buy. That’s a lot of waste of both food and money. If you throw out a lot of food, try putting your grocery receipts on your fridge to serve as a reminder that throwing away food also means throwing away money.
7. Become A Ruthless Negotiator
This goes along with the “challenge everything mentality” tip. If you do find any bills you think you’re paying too much for, call up your service provider and ask for a discount.
This goes for almost any larger purchase, too. Never be afraid to ask for a discount and negotiate if you think it’s warranted. You’ll need that negotiating practice for the home-buying process, anyway, right?
By challenging your spending, using what you have, selling what you don’t want, and earning more, you’ll be able to achieve your goal of saving for your first home down payment in no time.
