Four Creative Tips to Save for a Bigger Down Payment

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Step 1: Set Clear Goals & Budget

  • Step one is the most important. Get on the track with what is most obtainable and what you are willing and able to save. Determine your target amount, what do you want to save? Research home prices in your desired area and calculate the desired down payment percentage. When saving do not forget to account for closing costs, which can be around 5% of the loan amount.
  • Create a budget by tracking your income and expenses rigorously. Identify areas where you can reduce spending to free up some funds. Consider downloading NerdWallet or another budgeting app to help keep you keep on track.
  • Set a monthly savings goal. The best way to do this is by dividing your total down payment goal by the number of months you plan to save to determine how much you need to set aside per month.

Step 2: Optimize Your Savings

  • Step two of optimizing your savings is done by opening a separate savings account specifically for your down payment. Do this to keep the money separate and this in turn reduces the temptation to dip into it for other expenses. It is the out of sight out of mind concept.
  • Next, set up an automatic transfer with your credit union. This will allow you to move money from your checking account to your down payment savings account every paycheck. Act like this is a bill, it is non-negotiable, the money just automatically goes there.
  • Consider a high-yield savings account, this will allow your money to do some work for you as it sits it will earn you interest. If you are planning to save for longer terms such as 2-4 years, you may also consider low-risk investments like Share Certificates.

Step 3: Reduce Unnecessary Expenses and Boost Your Income

  • In order to reduce your expenses, you need to cut unnecessary spending. Review your budget and identify unneeded expenses that can be reduced or eliminated. This could include canceling unused subscriptions, reduce entertainment costs or dining out less. Don’t count cutting anything out too small. Small cuts can make a great impact over time.
  • You can also work on reducing your debt. Paying down high-interest debt, like credit card balances, can free up more money quickly than you think.
  • Ways to increase your income could include taking on a side hustle or freelance work, selling unused items or seeking a raise or promotion at your current job.

Step 4: Celebrate Saving Milestones

  • Saving enough for the down payment you want can be daunting and feel discouraging. To avoid these things, 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 for every $5,000 you save. This will help you stay motivated and on track to achieve your goals.
  • Share that success that you have worked so hard for! Make sure you celebrate with your friends, family or your partner if you’re saving together. According to Stash, an investment app, “loud budgeting” can not only help you stay accountable, but it can also be a way to engage and encourage your community!

Ready to make your homeownership dream a reality? Saving for a bigger down payment takes planning, creativity, and commitment—but the payoff is worth it. Whether you’re just getting started or want help refining your savings strategy, we’re here to help. Reach out to me, Kaylee Hamling, mortgage officer at Sentinel FCU, to talk through your goals and take the next step toward your future home.

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