An image of a stack of money.
Buying a home is the single biggest purchase many families ever make. And in today’s overheated housing market, with sale prices skyrocketing and some buyers coming to the table with all cash offers, landing a home is no easy task. It’s a reality that can make saving the money for such a purchase even more challenging.
But that’s no reason to lose hope. There continue to be countless success stories of families closing on a home, including single parents and single income households, despite the extreme market competitiveness.
If a new home is on your family’s to-do list for 2022 or beyond, one of the first steps to realizing that dream is saving money for the down payment. Here are some of the ways to effectively set aside cash for your home buying savings fund while also juggling the demands of a family budget.
Get rid of extraneous and discretionary expenses
First things first. More than a few finance experts suggest carefully reviewing your family’s current monthly spending and eliminating any extraneous or discretionary expenses when you’re trying to save a substantial amount of money for a home purchase. The low hanging fruit here is almost always monthly subscription expenses.
A recent J.D. Power survey found that Americans now subscribe to four streaming services, on average. This is up from three streaming services prior to the COVID pandemic. What’s more, consumers are spending about 24 percent more on these services. On average, consumers spent about $47 per month on subscriptions in December 2020, which is up from $38 in April of the same year.
“One area of spending that’s often overlooked is streaming and subscription services,” Michael Cummins, money saving expert and director of finance for Insurance Geek, tells Parents. “Consider cycling through streaming services on a seasonal basis and prioritize based on series releases. For example, consider paying for three months of Amazon Prime, three months of Disney+ and so on.”
Those who also subscribe to such services as Audible, YouTube Music and Spotify, might consider implementing a similar cycle based on your current listening habits.
“This can sound complicated, but with a few reminders on your phone’s calendar, you can cut your $35 streaming bill in half, saving over $200,” adds Cummins. “It may not sound like much, but that’s 2 percent of the average U.S. down payment.”
You may also want to consider forgoing some of the more expensive discretionary spending for a while—things like fancy clothes and luxury vacations. And finally, don’t overlook …….