Rent Now – Buy Later: How to Save Money for Your Future Home

Pretty much everybody starts out renting until they’re in a position to buy a home of their own. One of the biggest hurdles to buying a home is coming up with the down payment. Here are some easy ways to save money for a home.

1. Automate your Savings

Saving money is a lot easier when you don’t have to think about it. You can automatically have money deposited into your savings account via direct deposit.

You can set it up through your bank. Automatically putting money into your savings account is a great way to save money without even having to think about it.

2. Use an App like Acorns

Acorns is an app that helps you save by rounding up your purchases. For instance, if you were to buy a cup of coffee at Starbucks for $5.06, it will automatically deposit 94 cents into your savings account.

There is a small fee for using the service, but it’s well worth it if you have a hard time saving money.

3. Put Your Money in an Interest Bearing Account

You can really accelerate your house fund by putting your money into an account that earns interest. Sure savings accounts do give you interest, but it’s minimal.

Playing the stock market is risky especially if you don’t know what you’re doing. You should ask your bank about a CD. A certificate of deposit is a special account you put your savings into and earn 2-3% in interest. Usually, you can’t withdraw the funds for 12 months so make sure you’re at least a year away from getting a mortgage.

4. Find Cinema Alternatives

Going to movies these days costs a small fortune. Tickets are $15 a piece another $15 for popcorn and a drink, and if you have kids, you could spend close to $100.

Save money by staying and watching Netflix or Hulu. For $10 a month you can enjoy plenty of great movies and save money in the process.

5. Get a Roommate

A roommate is a great way to save money as long as you don’t mind rooming with someone. You can rent out a room for several hundred dollars per month.

For most people having a roommate is not ideal but adding thousands of dollars to your savings can significantly accelerate the process having you in your own home sooner.

6. Supplement Your Income

There are lots of things you can do to supplement your income. You could get a second job waiting tables, which is a great way to work a few hours here and there and make some decent cash. If you have stuff that you don’t use or need, sell it. You’d be surprised how much money can you make by selling your old stuff.

7. Remove Savings from Your Debit Card

If your savings account is linked to your debit card, you should remove it. It makes it too easy to dip into your savings whenever you want it. It should be fairly challenging to withdraw funds from savings; this will deter you from doing it, you can’t spend what you don’t have access to.

Conclusion

You should automate your savings as much as possible to force yourself into saving money. Talk to your banker about opening up a CD or put your money into bonds or a mutual fund. Save money on entertainment buy streaming movies instead of going to the movies. Pick up a second job or get a roommate to save even more money.