How to Save While Renting

If the prospect of saving for a down payment has deterred you from homeownership, these five tips could help put that goal back on your radar.

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If you’ve been renting for some time and finally feel ready to transition into homeownership, there is one major roadblock you’ve almost certainly encountered: money.

Between day-to-day expenses and the other unexpected costs that life sometimes brings us, saving up for a down payment can be difficult.

Thankfully, there are a few simple tips you can follow to make it easier to save while renting. The first step, of course, is to establish your goal. In most cases, it’s a good idea to plan on saving for a down payment of at least 10%. This would equate to $15,000 for a $150,000 home, $20,000 for a $200,000, and so on.

Don’t let these figures scare you though. Saving for a home is possible. By following these five saving strategies, you will reach your goal in no time.

1. Start trimming your expenses. Whether it’s eating out less often or limiting how much you spend on clothes, cutting back on unnecessary costs in your life can really add up over time. Allocating money you would otherwise spend frivolously toward your down payment is one surefire way to pad your savings account fast.

Allocating money you would otherwise spend frivolously toward your down payment instead is one surefire way to pad your savings account fast.

2. Take on a side job. If you have time to spare, picking up an additional source of income can help you reach your financial goals more quickly.

3. Take a year off from vacations. For those who love to travel, this may be easier said than done. However, the money you will save by temporarily abstaining from expensive trips will go a long way toward your homeownership goals. If this is one sacrifice you absolutely cannot make, consider taking a staycation instead.

4. Sell items you no longer need. Do you have any belongings lying around that you know you wouldn’t miss? If so, why not make some money from these items instead of simply tossing them to the curb? Selling things you no longer want or need is a great way to increase your savings while reducing the number of items you’ll have to pack when the time to move finally arrives.

5. Set aside work bonuses or your tax refund. Putting such funds toward a down payment can put you much closer to your ultimate savings goal.

These tips may seem easier said than done, but when you buckle down and try them for yourself, you will be sure to see results.

If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.