4 Ways to Save for Your Down Payment

by Bill and Aby Brooks, REALTORS® 08/16/2020

Image by Gino Crescoli from Pixabay

Although a 20 percent down payment is no longer the norm, you still need to save a considerable amount to cover all the initial costs of buying a home. With median down payments at seven percent, a $250,000 home will require a down payment of $17,500. Plus, you need to have funds for all the closing costs, including title fees. Thankfully, to get started in putting away that $20,000, or more, you do not have to make monumental changes to your finances. Just these small ones will do — and it can be a lot of fun, too!

Tuck Away All Your Fivers

To start your savings off right, you can tuck away every five dollar bill that comes your way. Simply put the fivers in an envelope as they appear, then deposit the whole lot at the end of the week. If you do not regularly carry cash, however, you can adjust this method to transferring the five bucks over to savings anytime your balance ends in a 5 or 0. That’s it. By the end of the year, you will marvel at how many fives have piled up.

Get Rolling with a Nickel

To take a progressive savings approach, all you need to start with is a nickel. On day one, take a nickel from your pocket and plunk it into a jar. Then, on the next day, put in 10 cents, then 15, then 20, and continue on in this manner until the end of the year. By day 365, you will only have to put in $18.25 to complete this savings plan. You can also switch it up a bit by working from $18.25 and moving downward or alternating from either end of the scale with 5 cents here, then $18 there. At the end, you will have more than $3,000 in savings without batting an eye.

Round It Up & Into Savings

Another painless way to save is by rounding up each and every one of your purchases, putting the remainder into savings. Although you will only put away 99 cents at most each purchase, the funds will add up quickly and leave you with plenty in the account by year’s end.  

Chart Out a Sinking Fund

If you just love to see your progress in action, chart out a sinking fund to track your savings. Simply print an outline of a house and create a lined chart up the side, starting at zero and moving all the way up to your savings goal. Then, fill in the home from the bottom up as you deposit money into savings. To figure out how much to save in your sinking fund, just divide your goal by the number of months you want it to take.

Since these saving methods do not require much of a lifestyle change, they can be a lot of fun to complete, especially as you see your balance grow. Just keep making small adjustments to your finances to continue to build your savings and your dreams of homeownership will come into focus before you know it.

About the Author
Author

Bill and Aby Brooks, REALTORS®

Aby’s understanding of excellent customer service stems from her extensive professional background. Prior to earning her real estate license in 2005, along with her college degree that focuses on business and engineering, Aby was the head of purchasing, inventory and quality assurance for an OEM medical and aerospace manufacturing company. Known by her clients and fellow realtors for her tenacity, honesty, integrity, and attention to detail, as a full-time realtor, she is also appreciated for her quick response to her client’s needs. Aby has been an avid horse rider and owner since the age of eight, with her husband Billas a local firefighter/EMT they are very active within the community. Bill served as a US Army Airborne Ranger in 75th Ranger Regiment, he is a combat-wounded veteran who was awarded a Purple Heart. Bill's background as facility Manager for an International metals company and as a firefighter/EMT gives him the experience, attention to detail and the desire to go above and beyond to serve his customers. The Brooks' serve on the board of a local non-profit (501c3) that gives back to the veterans, first responders and their families. The Brooks family resides on their small ranch in Manatee County. Aby& Bill excel in all types of real estate and their passion is helping people. “We genuinely like people, growing up in Sarasota and Manatee counties and now raising our own family here, it is an absolute pleasure to share our growing area with newcomers and reminisce with longtime residents. Our area has so much to offer and it is our business to help folks buy and sell their own piece of paradise.”