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How to Save Money for a Down Payment on a House

Step #1: Find Out How Much Money You Will Need to Save

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You will first need to find out how much you will need to save for a down payment. You will need to sit down with your mortgage lender and figure out how much of a mortgage you qualify for. It is best to put 20% or more money down when purchasing a home, however a lower down payment loan programs are available.

Step #2: Start a Budget

By starting a budget it will help you see where your money is going each month. In excel, you take your gross income and subtract any expenses you have. You will want to have a budget for what you expect to spend each month and what you actually spend. Then you can compare the difference between your budget and actual at the end of each month. This will help recognize areas you are overspending on and help you make goals each month to save more the next month.

Step #3: Reduce Spending and Save More

Look for cheaper ways of doing things. Here are a few examples:

-Do you spend a lot of money on a lot of clothes? Try wearing the clothes you already have in your wardrobe.

-Do you spend a lot of money on eating out? You can really save money by eating at home more and cooking your meals.

-Do you have credit card debt? Try using physical cash rather than credit so you don’t overspend.

-Do you use cable? Try getting rid of cable and using Hulu or Netflix.

 

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