Saving enough money for a down payment on a home is one of the biggest hurdles keeping prospective home buyers from actually buying. In the last few years, this has been truer than ever with record high inflation and interest rate increases. In general, where I live in the northeast, it’s safe to say most things are more expensive lately than ever before.

It’s obvious that inflationary times create obstacles for people trying to buy homes, especially generations that may not have a lot in savings. With that said, though it is more challenging to go through the home buying process, it is not impossible. There are some steps you can take to better position yourself to make your home buying dream come true.

1. Cut down on debt. Debt is one of the biggest hang ups for new home buyers, especially people with college loans and expensive car loans. It might be worthwhile to consider consolidating debt that can’t be completely paid off. Additionally, reduce your monthly debts by downgrading on things that are not a priority for you. You may not necessarily need that latest model vehicle or the latest and greatest iPhone. Could you save some money every month by going with a cheaper model or plan? Worth looking into at the very least. As of the writing of this article, I drive a 16 year old car with close to nearly 200K miles on it. Why? Because I like not having a car note, and I don’t particularly care about impressing people with a nice car.
2. Pay yourself first. This means depositing money into a savings account before you eve have access to it. Not everyone may be able to swing this, but if you can afford to redirect a small amount of your paycheck into a savings account that is difficult to access, you will save money without even thinking about it. When it comes to finances and bank accounts, I do believe in meticulously checking accounts and funds, however with this type of savings account, you will truly get the most out of it by setting it and forgetting it.
3. Consider High Yield Savings Account. If you happen to come into money from tax returns or gifts or some other source, and you don’t need it right away, consider a high yield savings account. Nowadays you can find some that with give you an APR of 4-6%, which can be make a big difference over time.
4. Take advantage of credit card perks that will save you money. This could be a game changer or your kryptonite, depending on how you use credit cards. If you can responsibly use a credit card and pay it down completely every month, you could take advantage of major benefits like airmiles, hotel points, and other perks that will save you money on travel, grocery shopping, and other day to day expenses. If you don’t trust yourself with a credit card, skip this section.
5. Get creative with your income. Though it often seems like bills are stacking up and hard to keep up with, there is money to be made everywhere. If you’re serious about putting away money to buy a home in the near future, consider getting creative with another source of income. Things like rideshare service or food delivery can make a great supplemental source of income. You could sell old possessions that are collecting dust that you don’t use. You could get an extra roommate to cut down on your living expense. Like I said, get creative with this as it does not have to be something you hate.

Daunting as saving money might seem, with the right gameplan and strategy, it really is doable. Sometimes it just takes that extra effort, persistence, and commitment to building your future and your family’s generational wealth. Thanks for reading!