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Mortgage Basics

6 Easy Ways to Save for a New Home

September 12, 2017

Purchasing a home is a big commitment, but it’s often a smart choice for your financial future. With these simple tricks, you’ll be able to save up for a down payment with ease.

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Establish a house fund.

It sounds obvious, but make sure you’re putting money aside specifically for your new home. Each month, designate a dollar amount that will go into the house fund. One way to do this is by making “virtual” mortgage payments. For example, if you’re currently paying $800 per month in rent and your home payments are expected to be $1,050, the house fund gets the extra $250. It might take some time, but you’ll be at your goal before you know it.

Shop around for lower insurance rates.

With all the flashy commercials and advertisements, it can be easy to fall into the trap of a car insurance “deal” that may be too good to be true. Do your research, and find a provider that is a good fit financially and (most importantly) when it’s time to file that insurance claim.

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Postpone large expenses.

Sure, a vacation sounds nice. But when you’re saving for a new home, it might not be the best time to splurge on extravagant purchases. If you’re thinking about making a big purchase that isn’t a necessity, take a step back and reconsider. Hawaii will still be there after you buy a house!

Create a budget.

…and stick to it! Having a budget in place can make a world of difference when you’re trying to save money. As a rule of thumb, plan for the worst-case scenario – then, when you don’t end up spending as much as you planned for, you’ll have more money to put into your house fund!

Automate your savings.

Do yourself a financial favor today and set up automated “payments” to your savings account. By moving money into your savings before you have a chance to spend it, you’re paying your “savings account bill.” This savings account can be your down payment fund if you’re looking to buy a new home or take on a home remodel project.

Capitalize on credit card rewards

There’s nothing better than getting paid to spend money. Okay, so that’s not exactly how rewards programs work, but they do put some extra change in your pocket! Many credit card companies offer cash back promotions when you use their card. When you receive your check for credit card rewards, make a commitment to automatically add it to your home savings fund. Another great idea is to join an online rebate program, such as Rakuten, which allows you to earn a certain percentage of cash back at over 2,000 stores when you shop them online. Rakuten is free to join, and is another great way to save a little “spare change” for your upcoming home purchase. Every little bit adds up!

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