Ways to Save Your Down Payment
When we talk about down payment, we first have to consider some of the facts. First of all the minimum down payment in kingston and area is 5%. Keep in mind that this is subject to a charge for insurance and to avoid this, you will require a minimum of 20%. Now i always recommend that you speak with a mortgage professional regarding your current situation and also your mortgage needs, they will best be able to advise you on the best strategies moving forward and should be completely upto date on the forever changeling lending rules
but today we are just going to look at how to keep more cash in your pocket and how to put more away for that future home.
Every little bit counts and there are some great ways to start trimming your current obligations. These extra funds which don't seem like much will eventually start to add up, here are a few options:
- TV, phone, and internet bills. Is there a cheaper plan you could downgrade to? Are you using all of what you are paying for now?
- Subscriptions. Are there any that you got a while ago but still haven’t canceled? What about those magazines that keep piling up on your shelf?
- Vehicle expenses. Is there any way that you can cut down on gas, insurance, or monthly payments? Are you paying for parking at work or on top of rent?
- Groceries. Can you cook more meals at home, or switch to a generic brand for certain items?
- Rent. Can you negotiate a lower monthly rent cost in exchange for doing some maintenance or offering assistance in other ways?
There are also some life style changes that could be applied. like by taking the DIY route. This includes everything from dyeing your own hair to changing your own oil.
Not only will this help you to identify where you can cut costs, but it can also help you to be more aware of exactly how much you have coming in and going out every month, which will ease you into creating a budget.
Its one of the easiest and hardest things to do. Setting a budget is the easy part however sticking to the budget can be near impossible. It take determination and sacrifice but when you are able to build and maintain this habit you will be able to save and save not to mention the dramatic reduction in stress regarding money and over spending
Having a monthly budget is a good place to start and you can adjust it in a way the fits your pay schedule. Now keep in mind, like myself there are many out there that don't receive a set pay amount on a certain day this can be even harder to budget for. I recommend that if this is the way your income works that you open a separate account to put all your income into and set your self up on a payment system. I pay myself every Friday a set amount from this other account.
lets not forget all the other obligation that we seem to never consider (I am guilty of this for sure.) like special events and yearly obligations. This can account up to 40% of your budget and we don't even realize it. So do the best you can to track all the events coming up in the future for the year like birthdays, holidays and any other annual responsibilities
Extra money is always a nice surprise, but while you are focusing in on saving, there’s only one place you should be putting it. That means that as tempting as it might be to spend that $50 check your grandmother sent you for your birthday, it’s best to put it straight towards your down payment.
The same goes if you get a raise at work. Instead of spending more than you were before, continue to maintain your monthly spending and put the extra away.
Other unexpected windfalls include:
- Tax returns.
- Life insurance premiums.
Saving these instead of spending them will give your down payment fund a nice boost, while also making sure that your extra money has a purpose.
Saving money isn’t just about making a budget and cutting costs. You can also start making extra money outside of your regular income to add to your down payment fund. How? Start thinking of what your hobbies are and how you could turn them into casual income.
For example, if you like to dabble in web development, you could make basic websites on the side, or if you make crafts, consider setting up an online shop on Etsy or selling on a local buy, sell, and trade website.
and don't forget about perhaps downsizing some of your belongings we all have stuff that we never seem to use why not sell it to add to that down payment fund
Banking Your Bucks
Now that you have a savings plan and everything is moving just as you planned. You have to consider where you are keeping this money.
I never recommend hiding it under your mattress but if you wish i cant stop you. There are many options like a high interest savings account or some other type of investment. Once again speak to a professional about what your goals are and you time line. You don't want to get stuck in something where the fees are going to start eating away at your hard earned cash.
Delivering a Down Payment
It can be very daunting, saving and keeping this money but getting into this habit will launch you forward in any of your financial goals so I hope this helps and gets you even closer to your property dreams.