Blog

6 Tips for Saving for Your Down Payment

Saving enough money for a down payment is an achievable goal with a solid savings plan. Typically, 5 to 20 percent of the home’s value is needed for a down payment. Use these simple strategies to make saving for a home easy:

  1. Develop a budget & timeline

    Start by determining how much you’ll need for a down payment. Create a budget and calculate how much you can realistically save each month – that will help you gauge when you’ll be ready to shop around or make a purchase.

  2. Establish a separate savings account

    Set up a separate savings account exclusively for your down payment and make your monthly contributions automatic. By keeping this money separate, you’ll be less likely to tap into it when you’re tight on cash.

  3. Shop around to reduce major monthly expenses

    It’s a good idea to check rates for your car insurance, renter’s insurance, health insurance, cable, Internet or cell phone plan. There may be deals or promotions available that allow you to save hundreds of dollars by adjusting your contracts.

  4. Monitor your spending

    With BankPlus’ Money Manager, found in online banking, keeping an eye on your spending is easier than ever. Track where most of your discretionary income is going. Identify areas where you could cut back (e.g. nice meals out, vacations, etc.) and instead put that money into savings.

  5. Look into state and local home-buying programs

    Many states, counties and local governments operate programs for first-time homebuyers. Some programs offer housing discounts, while others provide down payment loans or grants. Contact your banker to see what programs you may qualify for.

  6. Celebrate savings milestones

To avoid getting discouraged on your savings journey, break it up into smaller goals and reward yourself when you reach each one. If you need to save $30,000 total, consider treating yourself to a nice meal every $5,000 saved. This will help you stay motivated throughout the process.

Source: American Banker Association