Saving up to buy a home can seem like a big challenge. Your home is likely the biggest purchase you will ever make, and unlike saving for retirement, this payment is a large sum of money that you will need to access soon. This may seem challenging, but with a solid savings plan, anyone can save enough to put a down payment on their dream home. In this article, we’ll cover 5 easy ways to start saving for your down payment today.
- Budget your money wisely
The first and most important step in any savings plan is budgeting. To build your budget, examine your bank statements and credit card payments to see where your money is going. Make sure to keep track of how much you spend on necessary payments, such as rent, utilities, and student loan payments if you have them. Next, consider how much you spend on eating out, entertainment, and other nonessentials. While you are saving, it is a good idea to set limits on each of these categories and stick to it, setting aside the same amount each month as you save for your down payment.
2. Make your own lunch
One of the most effective ways to save is to cut down on bad spending habits, and one of the worst habits you can have is going out to lunch every day. In Ireland, the average office worker spends €5.50 per day on their lunch. If you go to a fancier or specialty restaurant, this could cost more than €10 per day. Studies show that making your own lunch and bringing it in to work every day could save you as much as €870 per year.
3. Skip an expensive holiday
While visiting a new destination is a great experience, and everyone needs a holiday now and then, they are not essential and can cost a fortune. Consider booking shorter trips, or enjoying a ‘staycation’ by visiting historical and cultural sites near your home. Another alternative is combining your holiday with a trip you were going to have to make anyway, like a friend’s wedding, for example.
4. Pick up a side hustle
There are plenty of flexible options to generate some extra income, in addition to your daily job. One of the most popular in recent years has been driving for a ridesharing company. Driving for Uber or Lyft is a great side hustle because they allow you to work as much or as little as you’d like. With these companies, you can pick your own hours and increase your income outside of a 9 to 5 job by driving on weekends or at night.
5. Automate your savings
If you struggle with impulse buying, like so many of us do, then it might be a wise idea to set up an automated savings plan. You can do this by contacting your bank and authorizing an automatic withdrawal from your primary checking account to a savings account. The bank will then transfer a specified amount of money per month into a savings account. Money will move from your paycheck to your savings without you ever seeing it happen, which is very useful for those who have trouble managing their money.
