A great way to ensure that you’re contributing to this regularly is by telling your payroll department that you want a certain amount deducted from every paycheck and into this account via direct deposit. As long as you have a solid monthly budget, this deduction will be barely noticeable. Start small!
Creating that budget is the easy part; it’s sticking to it that can get tricky. Be honest about your savings goals and spending habits to make sure your budget is as realistic as possible. Create a list of monthly expenses and note when things are paid off. If you’re more digitally minded, download one of the countless apps that make budgeting easy.
It’s going to be tempting to splurge (understandably so), but saving it will help in your pursuit of a new home. Plus, if you did a good job of setting up your budget, you won’t “need” this money anyway. Cash reserves like these will help get your down payment savings off the ground.
Your employer-sponsored contributions typically stop at 6%, so capping your own contributions there and putting remaining funds toward your future home may make sense.
Where are you spending too much? Where can you save? Consider the cars you drive, where you’re currently living, and the size of your property. Look at vacations, hobbies, recreation, and dining expenses. This will allow you to reach your homeownership goals quicker.