Prioritize Saving for a Down Payment

Prioritize Saving for a Down Payment

"... that 20 percent down payment is more critical than ever."

These days, there are just so many demands on our income that it can be difficult to allocate enough money for important long-term goals, such as the down payment for a new house.  You may find yourself spinning your wheels, longing for that dream of owning a home to come true, but not getting any closer each month.  Prioritizing your savings for a down payment is essential in reaching that goal.

Cut Out Fluff


Savings is critical, but so is enjoying life.  You should cut out some of the luxury items in your budget if it helps you get to your goals sooner, but don’t eliminate all the fun things you spend money on.  Try to find a balance between enjoying the now and enjoying the future.  Maybe instead of getting rid of cable altogether, you can opt for a smaller package that allows you to watch your favorite shows but doesn’t cost as much.

Save First, Splurge Later


Like taxes taken out of your paycheck, savings should come out before you pay anything else.  If you can’t save enough, you need to cut out some expenses, but making savings the number one priority will ensure money actually goes into your savings account.

 

Now that the days of zero-down home loans are almost completely at an end, that 20 percent down payment is more critical than ever.  If you really want to achieve your goal of homeownership, you need to make savings one of the highest priorities in your budget.  If it takes small sacrifices, like that latte every day, it will be well worth it when you turn the key in the door of your first home.