Many people make the mistake of trying to buy a house without having a down payment ready. They think that it is not absolutely necessary (especially with rates so low, they think they can’t afford to wait long enough to build up a down payment), and don’t see how they can be able to build up enough for the standard twenty percent down. However, it is necessary, and it can be done. But sometimes you have to be creative.
One of the best things you can do (for any type of savings), is to create a set goal for how much you want to save. It is a mental thing, but then, much of personal finance and saving money is psychological. If you have a set savings goal in mind, it will be a lot easier to motivate yourself to put extra money into savings, rather than on buying more stuff or eating out more. Everyone generally has at least a little wiggle room in their budget, but they don’t know about it because they are instinctively using that wiggle room on things they don’t need. If you have a goal that you are working toward, then you can begin to change that.
To that end, the first step is to take a good look at your spending and see if there is anything you can cut down on, even if it’s just for the time being while you build up your down payment. This is a good time to look at whether or not you really use your cable enough to justify it, or whether you really go to the gym enough so that your membership makes financial sense. Oftentimes we sign up for something (such as the examples of cable or a gym membership), but never actually evaluate whether or not we are getting enough usage out of it to justify the recurring cost. This can cost thousands of dollars over the long-run on having a slight convenience of being able to do something (such as going to the gym instead of going for a bike ride) that you might never actually do. If you are simply able to cut down a couple of these costs, you would have a great base for beginning to save up for a down payment on a house.
Another creative way to save would be to get a side job, just something you could do for a few hours per week. A common example would be something like a paper route – something that you can do at a time separate from your normal job, but will provide just a little extra cash for you. Since this type of thing would be in addition to your normal income, you could put all of the money from the side job into the down payment for the house. The extra work would be easier to swallow knowing that it was not a permanent thing, and you were just doing it until you could save up enough for a down payment. There are lots of other things you could turn into a side job, but they depend on your skills and interest. Look at the things you are good at, and then see if you can monetize any of those things. If you can, you could have a fun side hobby that makes a little income.
People often thing that saving for a full down payment on a house is not an achievable goal, but that is not true. It is difficult, but it can be done. You need to have a set savings goal, because that will help provide the motivation. After that, it’s a simple case of cutting some costs (looking for things you don’t use) and if possible, growing your side income, and putting all of that money to your down payment fund. If you can do these things, a 20% down payment is definitely achievable.