Saving A Down Payment

Saving for a down payment is a huge accomplishment and also hugely overwhelming at the same time. I need HOW much? In THIS economy? Yes, it’s true, that some types of loans still require 20% as a down payment in liquid cash. If this seems like a daunting and impossible task, here are a few tips to help you!

First, determine your goal number. It’s always easier when you have a hard and fast number that you’re working towards. Just telling yourself that you’ll “save as much money as possible” can leave you feeling overworked, resentful, and stressed out. However, sitting down and looking at the actual numbers can give you a clearer goal. 

Start by determining your max budget for the house you want to buy. If that number is $300,000 then you know you need to save $15,000. 

Next, set your timeline for saving. If you’d like to have that $15,000 saved in one year then divide by 12: $1,250 a month needs to be set aside so that you reach your goal on time. This exercise can give you a more realistic idea as to whether this goal is attainable or if you need to adjust your timeline. Look at your cash flow coming in and determine if setting aside $1,250 a month is even possible. 

This isn’t always as easy as giving up avocado toast (as the media likes to tease). Saving for a down payment takes diligence, determination, and communication with any other person involved in your home buying process. If you’re partnered, sit with that person and discuss what you might be able to sacrifice (do you really need Showtime AND HBO?) and then consider apps that help you budget. Being on the same page with where every dollar goes will help you reach your dream home faster than you might think possible!