There are many perks of being a renter. There is no mortgage payments, no annoying repairing work, no property taxes are some of them. Sounds too good to be true, isn’t it?
However, there is actually a big drawback of being a renter. You are not gaining equity in the home.
So, why are you not buying a home? The answer is simple. It is the lack of cash for a down payment like most of the renters.
According to a survey conducted by GoBankingRates.com, a personal finance website, one in five Americans does not even have a savings account and one-third of them who do have a zero balance on their account.
Nevertheless, the good news is you can start saving money to purchase your own home by following some simple steps mentioned below and build your own down payment fund.
Set yourself a target goal to achieve your down payment savings plan
First you need to figure out exactly how much house you can afford. It is important because it lets you to determine exactly how much you will need for a down payment and then put together a comprehensive savings plan.
Research have shown that people who set specific savings goal often does a better job at putting money away than those who do not have such plans.
Evaluate your spending routine
To evaluate your spending habits, you need to look at your bank and credit card statements of the last three months. This will give you a clear idea where your money is going and then figure out areas where you can cut your expenses to achieve your down payment savings plan.
Wither your cable TV package
In America, the average cable TV bill hit a record $99.10 in 2015, up 39 percent from 2010. Unless you have already cut the cord to downsize your cable TV plan, and streaming shows instead, can help you save some money.
If you are not will to give up channels you love, then call your cable operator and try to negotiate a lower rate. If there is another cable TV operator in your locality, then you have got some leverage.
Avail a smaller, cheaper apartment
Depending on the area you live, going from a one-bedroom apartment to a studio can save you thousands of dollars in rent every year.
If you are serious enough for your down payment savings, try to live modestly and cut down your expenses.
Downsizing your apartment can also reduce your electricity bills.
Get a side employment
Even though it is an age-old advice, getting a side employment is now easier than ever. Many startups like Uber, Lyft, Postmates, etc are offering side job opportunities and are perfect for people who need quick cash to meet their expenses.
You can also look for freelance work online through services like Upwork, TaskRabbit, etc and earn decent money to cover your down payment.
Sell your stuff locally and online
If you have some good old-fashioned stuff for sale, then it is the best time to sale those items. Start promoting your items on Craigslist or post ads in your neighborhood well in advance.
If you have some niche items for sale, then you should better off selling those items in eBay or similar sites.
Get a credit card with cash back rewards
Abrogate you no-frills credit card and get a credit card with cash back rewards. However, there is a caveat. Reward credit cards usually have high interest rates than normal credit cards. So, make sure you pay off your credit balance in full and right on time each month.
