Save for your down payment on your first home starting today!

Even at a young age, you were probably thinking about buying a house in some way, shape or form. While your hopes and dreams might have changed from an 18th century French chateau to a house in the suburbs, the game remains the same. After years of rent, you’re ready to own something. However, one of the most important pieces of buying a house is making the down payment, which usually is 20 percent of the total amount… not exactly something to scoff at. With home prices averaging $200,000, you need to be able to come up with at least $40,000 in order to own a home. So how can you properly save for a down payment?

Monetize What You Love To Do

You have a normal 9-to-5 job that you go to because it pays the bills, but you’ll need a little something extra to increase your down payment savings account. If you love crafts, sell your art on Etsy, a community marketplace that lets you set up an online store. If you enjoy doing tasks, or driving your city, work with TaskRabbit, or Uber and Lyft. Those people who are academically inclined can try their hand at tutoring, or even teaching a weekend class to get extra money to pay for a down payment.

Invest Early

If you’re one who makes plans early, then investing in stocks ten years before you make a down payment is your best way to go. Stocks are a good way to invest the money and see if it can go, though it comes with a risk. It is important to diversify your portfolio; ETFs, index funds, or bonds are other great options that are less volatile than stocks.

If you are five years out from making a down payment, it’s best to not invest in stocks, but long-term bonds.

If you are two to four years out from making a down payment, you should look at laddered bonds or CD’s to mitigate any interest rate risk and improve your rate of return.

While your money is growing from early investments, all you need to do a year from making that down payment is put some of the money in a savings account with a high yield. Since you’re going to be making the payment soon, it’s imperative that you access the money as soon as possible.

Bank Extra Cash

Everyone is always looking for a way to speed up the process of owning a home. Any extra cash flow you receive, whether it be in the form of a gift, a tax refund, bonus, or a large commission check, should be transferred immediately into your down payment saving account. Regularly depositing a few of these large cash amounts can chop a few years off of your savings timeline.

It’s important to follow all the advice above, while also being flexible. You never know what kinds of expenses (medical or otherwise) could come up, so make sure you have a solid nest egg built up beforehand.

Email me today at [email protected] so we can get started on helping you save today!