6 Best Ways To Save Money For A Mortgage Downpayment

Are you tight on cash, but need to pay the bills for the hefty sum of your mortgage downpayment?

It’s a cliche at this point, but money isn’t easy to come by. There are two ways to have the funds for your loans. Either you increase your income stream, or you decrease your spending habits.

If you’re looking for ways to save or calculator to curtail uncontrollable spending habits, read on for six helpful tips.

Let’s get started!

 

Skip the annual vacation

While the pandemic puts most people’s leisurely plans at a halt, many travellers still go on a holiday to destress and unwind. From the air flight cost, transportation, hotel, food, souvenirs and tour packages, each category comes with a sizeable chunk of money that’ll drain your fund pool before you know it. These vacation expenses ramp up significantly, so don’t be surprised if your final day tab ends up reaching a few thousand dollars.

Skip the holiday altogether if you’re serious about saving for your mortgage downpayment. The fleeting enjoyment from even just an overnight getaway will set you back many months of working to bring you back to speed.

 

Reduce high-interest debts

Do you have any loans or credit cards that you have to pay off each term? If yes, have you been holding off the payment of that loan for whatever reason?

Decreasing your debts should be high on the priority list when it comes to money management. The high-interest debts, in particular, can eat up a large portion of your monthly income. These interest rates can snowball and delay you from reaching the mortgage downpayment sooner than you should.

Cut down these debts as fast as possible. There are many ways to do it. For a start, you can ask for a low-interest credit card, decrease spending, or ask for a lower interest rate.

 

Avoid browsing online shops

The presence of online stores like Amazon at our fingertips makes purchasing the things we want very tempting. And the power of accessing these storefronts at our home and at any time we want, to purchase virtually anything we want, is a power that we can succumb to anytime. After all, with 96% of Americans shopping online, there’s no shortage of opportunities for sellers to round up the swayed masses.

Curbing a shopping addiction is never easy, especially if you’re an impulsive buyer with consistent Internet access. But in order to save money for the necessary expenses, you’d need to address the unimportant spending habits first. To avoid the temptation, resist the urge to even type the names of these online shops. Full stop. Even during days of massive discounts like Prime Day or Black Friday. Don’t waste your time dwelling or fighting against the temptation either; the end goal is for the desire to shop to subside to the neutral indifference.

 

Find cheaper subscriptions

Once your gym membership plan ends, try to see if you can find better deals around the city for the same quality. The same goes for your broadband connection and your mobile phone. Constantly be on the lookout for cheaper rates.

There’s always going to be new gyms opening and new deals released from home or competitor plans. Research to see if the new plan works provides you the same or better benefits at a lesser cost. If their service looks promising, make the switch as soon as you can to save funds in the long run.

 

Journalise your expenses

Visualising your expenses might seem like a total chore, but it’s essential if you want to stay on top of your finances. Manage your personal cash outflow by tracking your monthly expenses. Maybe you’ll notice that you spend way too much on a cup of coffee every morning, or maybe those dinner dates with friends and your significant other have spiked the costs drastically.

While having a little bit of fun here and there is never a bad thing, it’s doubly more important to know where your money is going. This is so that you won’t find any surprises (or lack thereof) in your savings account at the end of the day. 

On top of that, journalising these costs also lets you see which of your spending habits you can curb drastically. This will help you strategize and forecast for your mortgage downpayment.

 

Get an automatic savings account plan

If your bank allows this plan, an automatic savings plan can be an amazing personal savings system. It’s great because you deposit a fixed fund periodically from your host bank account into the automatic savings account.

You can set this plan wherein every time you receive a paycheck from your employer, a portion of that income will trickle into that automatic savings plan. This method is a predictable, automated, and non-fussy way to build funds, such as your mortgage downpayment, without having to constantly eye on it. 

To start, you’d need to agree with your employer to go with a direct deposit plan. Tell them that you’d want a fixed portion to go into savings while the rest goes to the checking account.

About Jennie McNichol

Jennie McNichol is the Co-Founder and Editor of Buggybuddys. She moved to Perth in 2010 after 11 years of living in London, working in the television industry for the BBC. She is the mother of two daughters aged 12 and 10 and loves the family-friendly lifestyle that Perth has to offer.

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