The thought of saving tens of thousands of dollars to put a down payment on a home can seem overwhelming. If you’re trying to figure out how to do it, you might want to downsize.
Consider moving to save money
Since housing is probably your biggest monthly expense, reducing the amount you pay in this area can save you money for a down payment sooner. If you currently live in a rented house or apartment and can move in the near future without violating the terms of your lease, this may be a good option.
Getting a smaller home, moving to a less expensive neighborhood, or sharing a house or apartment with one or more roommates could significantly reduce your monthly living expenses. This could free up hundreds of dollars a month that you can spend on a down payment.
Before deciding to downsize, weigh the pros and cons. Think about all your living expenses, not just rent. If you move to a new house with lower rent but end up spending more on utilities and food, you might not come out on top. Moving to a less expensive area may also not be a good idea if it means you have to take a longer commute that causes you to spend more on gas and feel stressed.
Consider finding a roommate
If you’re currently renting a house or apartment and have an extra bedroom, it might be a good idea to find a roommate. This will reduce the amount you pay yourself for rent each month and give you more money to put down on a house. It will also allow you to avoid the costs and stress associated with moving to a new location and avoid a longer commute and other hassles.
Look for other ways to downsize
You can downsize other parts of your life to save money for a down payment. For example, you can use public transit, carpool, or work from home to reduce the amount you spend on gas and vehicle maintenance. You can cook at home more often to reduce the amount you spend on takeout. You can get rid of cable, switch to a cheaper cell phone plan, and eliminate or reduce other non-essential expenses.
Living a simpler life can help you buy a house sooner
Cutting back on the things you’re used to and love can be difficult, but it can pay off in the long run. These types of changes can be inconvenient, but they can put you on the right track and help you reach your goal of becoming a homeowner faster.