To transition from being a tenant to a homeowner, you'd require a considerable down payment, generally 5 to 20 percent of the property's worth. Consider the following advice to help you save for it!
Create a budget and establish a timeline
Start by determining the amount you'll need for a down payment. Set a budget and decide how much you can realistically save each month - this will help you figure out the feasible time to switch from being a tenant to a homeowner.
Establish a specific savings account
Create a separate savings account exclusively for your down payment and automate your monthly contributions. Keeping this money separate will discourage you from dipping into it when you're short on cash.
Evaluate costs to reduce significant monthly expenses.
It's a good idea to review the rates of your car and renter's insurance, health coverage, cable, internet, or mobile phone plan. You could potentially save a significant amount by changing your contracts if there are offers or discounts available.
Watch your spending
Online banking makes it easier than ever to keep an eye on your spending. Identify where most of your discretionary income is going. Identify areas where you could cut costs (like eating out, vacations, etc.) and redirect that money into savings.
Check state and local home purchasing programs
Many states, counties, and local governments have programs for first-time homebuyers. Some of these programs offer price reductions on homes, while others provide loans or grants for down payments.
Commemorate savings achievements
Saving enough for a down payment can seem daunting. To avoid feeling disheartened, break it down into smaller goals and reward yourself each time you reach one. If you need to save a total of $30,000, consider treating yourself to a fancy dinner for every $5,000 you save. This can help keep you motivated throughout the process.
