In a recent study conducted by the Associated Press, nearly 67 percent of Americans polled said they would struggle to come up with $1,000 extra dollars in the event an emergency.
While coming up with extra money may be difficult, you will have to find a way to save if you are in the market to buy a home. Going into this process with zero savings is a recipe for disaster.
Getting a ballpark figure on how much home you can afford and what your down payment needs to be is easy with the use of an FHA loan calculator. With this information, setting a target goal for your savings will be simple.
Are you attempting to save money for a home down payment? Here are some essential tips that can help you fill your savings account quickly.
- Work on Paying Off Your Credit Cards
If you are like most Americans, you carry credit card balances from month to month. The longer it takes you to pay off a credit card, the higher your interest fees will be. Working on paying off your credit card balances can help you greatly in your pursuit to save a home down payment.
After you pay off these balances, you can start to save much more each month. Not only will eliminating credit card debt help you save money, it will improve your credit score as well.
- Investing in CDs is Wise
The cash you free up from paying off your credit cards can be better invested into certificates of deposit (CDs). These investments are both low-risk and will allow you to access your money whenever it is needed.
The best way to maximize the earning power of this investment is by opening a number of different CDs. Before choosing a CD to invest in, find out what its maturity date is. Investing in three, six and twelve month CDs is a great way to make more money.
Most investment professionals refer to this as laddering. Effectively laddering your CD investments will help you adjust your savings as rates change over the year.
- Get a Second Job
If you are extremely dedicated to reaching your savings goals, getting a second job is a good idea. With a second source of income, you should be able to fill your coffers in no time.
Delivering pizzas or even working at a local convenience store can help you get more money for a down payment. Generally, these types of jobs have flexible schedules and it will be easy to get hired. All of the money you make from your second job needs to go directly into your savings.
Having this type of financial discipline will definitely pay off in the long run.
- 4. Sell All Of Your Unwanted Items
Having a garage sale is also a good way to raise money for your down payment fund. Most people have a number of things they rarely use. Instead of hanging onto these things and creating more clutter in your home, you can sell them to someone who really needs them.
The key to having a successful garage sale is adequately promoting it. Using venues like social media to spread the word about this event can help you increase the amount of traffic your garage sale receives.
Saving money will require a lot of discipline and hard work. Seeking out the advice of a financial advisor can help you develop a plan of action that will make saving for a down payment a bit easier.
