As the holiday season moves into full swing, you might have your eye on a big gift for yourself: your first home. At this time of year, though, saving for a down payment and closing costs can seem like an impossible balancing act. Rather than putting off your home-buying plans until the new year, make adjustments to your seasonal spending and save more for a home with these tips.
1. Limit spending ahead of time
When you embark on a road trip, you have a destination in mind. The same should be true for holiday shopping: You need to have an end goal of how much (or how little) you want to spend.
While the average adult in the U.S. plans to spend just over $997 for the holidays this year, according to the National Retail Federation, you don’t have to spend anywhere near that much. Bankrate’s guide to saving money during the holidays can help you find ways to cap your expenses, and at the same time, use Bankrate’s down payment calculator to get an idea of how much you need to set aside for your home.
Along with imposing a limit on holiday spending, stick to using cash or your debit card when making seasonal purchases. The act of handing over real dollar bills or seeing money immediately leave your checking account can help curb the desire to spend. If you’re going the cash route, an envelope budget can help you split up your money into categories while you shop.
Another trick to limit spending: Disable push notifications and location-tracking from any retail apps on your phone, which helps you avoid advertisements about sales that could entice you to spend more than you planned to.
2. Set everyone’s expectations
If there are expectations related to how you typically give gifts for the holidays, dispel those by sharing your home-buying plans with everyone on your list. Along with helping your loved ones recognize why this year might be different, you’ll help them understand what’s on your own list: cash for a down payment. (If a family member or friend plans to make a sizable contribution to your down payment for the holidays, make sure it is documented in a gift letter.)
In your family or friend group, consider implementing a maximum price on gifts this year, too. If setting a limit feels uncomfortable, know you’re not the only one who wants to save money. A Bankrate survey earlier this year revealed that more than 50 percent of Americans regret either not saving enough or taking on too much credit card debt.
Whether or not the dollar limit sticks, you can save even …….