The 8 Best Ways to Save for a House While Renting
November 17, 2022
For those who have always dreamed of buying a home, the first step is saving up enough money for the down payment. However, saving for a down payment can seem like an impossible challenge while paying rent. If you want to buy a new home soon, here’s how to save for a house while renting.
Open a Separate Savings Account
The first step to saving for a down payment is to create a savings account specifically for your future home. Months when you have money left over after bills and necessities, transfer it into your savings account. You can set up monthly transfers to the savings account if you have enough disposable income.
Set a Goal
Set a savings goal to ensure you get closer each month or year to buying your dream house. A goal could be to set aside $200 each month for the down payment or to have $20,000 saved up in 3 years, no matter the means.
Cut Back Where Feasible
Unfortunately, many of the things we use daily require subscriptions. Between services like cable, Netflix, HBO, Amazon Prime, Disney+ and Spotify, and places like gyms and warehouse memberships, regular monthly fees can add up quickly. If you have memberships or subscriptions to similar services that you don’t use regularly, consider dropping them to save money each month.
Create a Budget
Budgeting is one of the most effective means of saving money. By analyzing your spending over the past couple of months, you can determine how much money you spend on what. Once you have an idea of average spending, create a budget that includes categories like housing, transportation, food, utilities, entertainment, loans and any other necessities. You can put whatever money you have left from your income into your down payment savings account.
Save on Utilities
Utility bills are regular payments that you cannot avoid. However, upgrading appliances, improving insulation and making minor repairs like sealing gaps in windows or doors can help save on some bills. Additionally, cutting back on central heating and air conditioning usage can help save on bills.
Reduce Retirement Savings
Most workers have a retirement savings plan set up with their employer. If you have a 401k or another savings plan, consider either cutting back on your contributions or stopping them altogether for a short time. Diverging retirement savings to your down payment savings account can significantly boost your savings goal.
Depending on your profession and hobbies, you can start a side gig for extra money. Many professionals find part-time contract work on the side a great way to make additional income. If you’re crafty or an artist, consider making items to sell online.
Find a Way to Lower Rent Costs
Today, it’s the norm to live with roommates to cut living costs. If you’re living alone or with a significant other, consider adding an extra roommate to help cut down on costs. Alternatively, do what many other professionals do and live with family members to help generate more savings.
Work With an Experienced Realtor Team
Now that you know a few creative ways to come up with a down payment for your first home, it’s time to get in touch with the Anne Townes Team. We are experienced realtors dedicated to helping our clients throughout the entire home buying process – from start to finish. Contact us today and let us help you make your homeownership dreams come true.