Looking for a creative way to save for a down payment? It’s a tale as old as time: the need to put down a down payment can often be a stumbling block for many home buyers. This is especially true for Millennials, who often find themselves simultaneously trying to pay down their student debt and pad their 401(k)s — all while also trying to save up to buy a home.
Fortunately, there’s some good news for today’s home buyers. Despite what you may have heard, long gone are the days where putting down a large down payment (as much as 20 percent) is the norm, or even expected. Today, the median down payment made by first time home buyers is 6 percent of the purchase price — a much more attainable figure.
There are a number of ways that you can get creative to help save for your down payment. Set a realistic goal for your down payment and then consider some of the following strategies to help turn your dream of owning a home into a reality.
#1. Gig it up to save for a down payment
It’s no secret that anything worth having is worth sacrificing for, and owning your own home is no exception. To help speed up the path to your down payment goal, consider joining the gig economy and pick up a side gig. It’s estimated than nearly 1 in 3 Americans currently works in the gig economy, with the bulk of these jobs being side-gigs. Consider taking on some additional work to help you earn some extra money and save more for your down payment.
Fortunately, it’s easier than ever to land a side gig. Check out employment sites such as Monster.com or Indeed.com, or consider working for a gig employer like Uber, Lyft, or Instacart.
#2. Save for a downpayment by temporarily downsizing your life
It comes as no surprise, but the biggest monthly expense for most people is rent. In fact, it can take up a big portion of your monthly income, making it nearly impossible to set aside any savings to use for a down payment, once the rest of your bills are paid. If you are serious about saving money to buy a home, temporarily downsizing your life and your living arrangements can be a great way to save money quickly.
Another option, if it’s available to you, is to move back in with your parents or other family members, temporarily. A recent study estimated that nearly half of recent college graduates moved back into their parents’ home after graduation to help save money. If this isn’t an option for you, downsizing to a smaller apartment or even bringing in a roommate can both be great solutions to help you save money.
#3. Sell your clutter to save big
Spring cleaning isn’t just for the spring anymore. No matter the season, it’s always the perfect time to sell off anything you aren’t using or that is taking up space. Sell your old clothes, furniture or electronics you no longer need, and get ready to bring in some serious cash — all while decluttering your space. Depending on what you are selling, there are a number of online platforms that can help broaden your audience. Facebook Marketplace, Let It Go, and Mercari are all great options for selling online.
At Reali, we offer honest and transparent real estate service, with experienced local agents, big savings, and zero pressure. Whether you’re just getting started or you’ve been through the home buying ringer, Reali can help you buy a home. Ready to jump in, or just want to test the waters? Either way, let us help you get started.