5 Painless Ways to Save for a Home
Do you want to buy a home but don't have enough saved for a down payment? For some, saving equals sacrifice. Granted, to save you need to spend less but there are ways you can cut expenditures in the short term that you won’t miss and over the long term can help you realize your dream of home ownership. So whether you are a veteran saver or just getting your down payment fund off the ground, consider my 5 painless, no-anesthesia-necessary ways you can start saving today.
1. The Double Play - Improve Your Credit Score
The health of your FICA or Vantage Score has a direct effect on your interest rates. The higher your score, the lower the rate of interest you will pay to borrow money. Individuals with good scores can often negotiate lower rates on credit cards and generally also pay lower auto insurance rates. As an additional incentive, if you are thinking of buying a home, an excellent credit score will not only save you thousands over the life of your mortgage but make it easier to be approved for a loan when the time comes. So in terms of buying your dream home, this is a double play!
2. Evaluate Your Auto Insurance Coverage
Speaking of auto insurance, if you have not reviewed your policy recently, now is a great time. One way to save on monthly premiums is to raise the deductible limits. If your car is older and you own it, perhaps you should consider dropping collision and comprehensive coverage. It is a good idea to review your auto policy yearly anyway and adjust where necessary.
3. The Hat Trick - Internet, Cable and Phone
Almost all major cable companies today have a purchase plan that combines television, internet and phone service. Combining these 3 services as a bundle will generally lower your monthly costs. An added bonus is simplifying your life with one bill payment instead of three! Shop around on the internet and also check with your cellular provider since some offer similar service plans.
4. Prepaid Cell Phones
When was the last time you gave some thought and attention to your cellular plan? Now is the perfect time to review your cell phone usage. If you are not using everything you pay for why not opt for a less expense plan, or even a prepaid cell phone. Although the prepaid route will not work for everyone, for many it can be a easy and painless way to save on monthly cellular service. There are plans offered by the major carriers, and also by smaller relatively unknown companies that actually buy services from AT&T, Sprint, and others. Get your research started with this very informative video by PCMag.
4. Be a Smart Shopper
These days you can buy almost anything online, with many online retailers offering deals. Generally speaking, the larger the purchase the more you may save! Before you make that purchase, check online for sales, coupons, and special offers to get your best price. If you charge your purchase, some credit cards may offer you a refund if a lower price is found in a specified number of days. You can find a very informative and in depth post on NerdWallet including examples of credit cards that offer this benefit.
5. Cash Back Credit Cards
With that good credit we mentioned earlier, you can get favorable rates on credit card options that reward you with up to 5% cash back on your charges. If you pay all your monthly bills and expenditures such as gasoline and groceries on your card, the savings in cash back rewards can add up. Keep in mind you should pay the balance every month to avoid interest charges and keep the discretionary spending at bay. Credit Karma has some good information on cash back credit card offers to get you started.
So there you have my 5 painless, easy-peasy suggestions to get your saving program off the ground. Don't forget to take those monthly savings and feed it to that “Buy a Home” piggy bank! In today's market, with down payment requirements as low as 3%, you may be moving into your very own home sooner than you think!