Manage Money

Smart Ways to Arrange the Down Payment for Your New Home

Are you planning to buy your first home? Then you are well aware of the humongous challenge ahead of you - Down payment for your home loan.

The challenge? To save every extra penny to stack up that down payment for your new home. High-five if you think saving money is difficult. I had to toil hard to save for my first home.

When it comes to buying a house, the brainstorming session to figure out creative ways to pinch pennies is painstaking. So, if you're a prospective homebuyer trying to save money, I feel your pain. That's why I am here with my 19 tried-and-true tips to get your dream home sooner than expected.

So, let's begin.

  • Create A Household Budget -  A household budget will help you determine how much you can expect to save every month. Along with it, you will also be able to understand the areas that need a little expenditure trimming.

  • Take Advantage of Government-Run Programs - Government-funded programs like Pradhan Mantri Awas Yojana can be a big help. If you belong to the middle income group (MIG), you will get added assistance on your home acquisition/construction of a house. Check out this link to see what might be available for you.

  • Use Gift Funds - Although gift funds may look like an unconventional way, in the end, every penny counts. You can ask your family and friends to gift you cash that can add up to your down payment.

Increase your Modes of Income 

  • Become a Freelancer

One of the legit options to mint more money is by signing up on websites like Elance, Upwork, and Guru. You can pick up any job ranging from researching, writing to data entry. A few hours working online during weekends could help you earn some extra bucks.

  • Sell Your Stuff

Maybe, it's time to get rid of those unwanted items collecting dust all over your home. Get on OLX or eBay for some extra cash.

  • Get Behind the Wheel.

If your driving record is spick and span, you could get paid to drive passengers with Uber, Ola, or Rapido.

  • Reap Benefits from Your Hobbies.

Monetize your hobbies by selling them online through Instagram or Etsy. Alternatively, you can even consider catering for your neighbor's party if you like cooking, or you could offer to tutor lessons to the neighboring kids. 

  • Leverage the Space in Your Place 

If you have a little extra space in your apartment or house, you can sign up for Airbnb and earn some extra cash.

Lifestyle Shift 

A little tweaking in your lifestyle would help you save some extra bucks for the down payment. 

  • Workout at Home 

Canceling your gym membership can help you get those extra thousand bucks you need. Instead, you can try running or exercising at home

  • Monitor those Subscriptions

Have you ever tried to find out how many streaming services you pay for?

AltBalaji? Netflix? Amazon Prime? 

Cutting down on these subscription luxuries could save you a considerable amount each year.

  • Shop Smarter

Slashing your grocery budget can power up your savings. Making a grocery list will help you avoid impulse buys. You can even start buying items in bulk to save up. Take advantage of sales and coupons to leverage your savings.

  • Plan Meals at Home

With almost no time, dining out seems more like a compulsion after a long day at the office. However, eating out can lead to overspending. Instead, you can plan your meals at home to save plenty by planning and budgeting for your weekly food purchases. 

  • Change Your Commute

If you live close to your work, you can ride your cycle. Or else, you can commute by public transport or even take advantage of carpool apps to save some extra bucks. If you are a woman, you've got other options as well.

A Few More Money-Saving Ideas

  • e-file Your Taxes

Did you know you can save money if you e-file your taxes? You can. After all, it's a nice chunk of change to put directly into your down payment savings account.

  • Go On a Spending "Diet"

You can put yourself on a 30-day spending diet by limiting your expenses to only essential purchases. Every week, you can save by depositing the money that you planned to spend elsewhere.

  • Automate Your Savings

One of the easiest ways to save more money into your down payment savings account is by automating it. Just set it and forget it.

  • Follow The 52-Week Rule

The 52-week rule is an easy way to build your savings, steadily. The rule is simple: Start by saving Rs.10 on the first week, Rs 20 on the second week, and so on. So, by the time you get to week 52, you will be saving upto Rs.520, which adds up to a considerable amount.

  • Take Advantage Of Credit Card Reward Points

You can start using your credit card reward points and perks to make purchases. Those rewards points or cash-back bonuses can help you save on everything from groceries to airline miles to hotel stays (cutdown on the last two though - you’ve got money to save).

  • Cut The Biggest Expenses

If you want to save big, you will have to cut the biggest expenses rather than cutting down small purchases. Though, they will add up, the tiny cuts never add up enough to save for a down payment.

The Bottom Line

Everyone dreams of a home of their own. But the down payment acts as a roadblock in making it a success. Although saving up may seem impossible at first, you can follow several unconventional ways to raise enough for your down payment.

Haven't applied for your home loan yet? Apply right away with mymoneykarma. We promise not only a hassle-free process, but also the best interest rates from across banks.

 

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