Putting money aside to raise a down payment can be long and discouraging, but the pursuit of such a serious goal is also a good opportunity to develop better financial discipline, which can be applied later for other purposes as well.
Opening a separate savings account for that and depositing an amount each month and automatically withdrawing from a current account is the basis. But how will you save?
1- Pay your credit cards
Paying your credit card balance is very important because it will be much harder to qualify for a loan with a high debt ratio, especially for current credit. High interest rate debt is a huge drag on your savings. It’s important to have a good credit report when it comes time to apply for a loan at the bank.
2- Save everyday
Whenever you are going to make an expense, like buying a coffee or dinner at the restaurant, ask yourself if it’s really worth it to delay your goal to this end. We often tend to think that “small” expenses have no impact, but in the long run they end up accumulating and are very expensive, especially if we are talking about a medium-term goal such as funds.
3- Postpone holidays
Every little money saved counts, but the biggest sums are those that give a real boost of enthusiasm since they allow to make the progress made and the proximity of the goal. To make a cross temporarily on holidays is a sacrifice, but to pay the amount normally reserved for holidays in savings is probably the best opportunity to get ahead of the project for several months.
4- Set aside all excess money
Take advantage of “monetary excess” (bonus, salary increase, inheritance, etc.) to improve your down payment, since these are amounts that are not usually included in your budget.
5- Reconsider your car
Do you really need a car? Maybe not. Even if public transportation comes with its costs and disadvantages, you will be financially successful. You can save a lot simply by changing your transportation habits, you will not have to pay for petrol or car insurance.
Saving for a down payment is often not an easy task but is very feasible. To achieve this, you just have to set a goal, put in savings mode and make some minor changes in your lifestyle.