from Tip Hero Robert Cordray

With the housing market becoming more steady and more people wanting to take the leap into owning a home, you can make your offer stand out on the home of your dreams by saving up to put a sizable down payment. There are several things you can do to achieve your goal of saving up a down payment toward a home.

Analyze your Budget

The first step to saving up for your dream home has to be analyzing your budget. Sit down and figure out how much money is coming in and out of your bank account each month. Look closely at your expenditures. Determine which are necessary and cannot be changed (home warranty), which are nice but not mandatory (cable) and which are not necessary (wine of the month club). Do yourself a favor and think long-term. If you have to go without your wine of the month club for the next year or two, will owning your own home make up for that? If so, consider it unnecessary. The more unnecessary expenditures you can identify, the easier the next step will be.

Trim the Fat

After analyzing your budget to see what is unnecessary, cancel those subscriptions or services. Do you really need to hire someone to come clean your gutters or can you get out your ladder and do it yourself? Anywhere you can stop spending money increases your savings automatically! Now you need to look closely at your expenditures that make your life nicer but are not really mandatory. This is the hard part. What can you change to make your expenditures smaller? An example is cable. There are so many packages and carriers to choose from, you should be able to negotiate a better rate for what you currently subscribe to or switch carriers to get a better rate. Consider cutting out channels you do not watch to lower the monthly rate. Instead of going out to dinner and a movie every week, try cooking a new or exotic dish at home and renting a DVD from one of the many kiosks available everywhere.

Another smart thing to do to save money each month is lowering your necessary monthly payments. Call your credit card company and ask if your interest rate can be reduced. It never hurts to ask and it could yield some great benefits! Alternatively, consider consolidating your credit cards and get the payments lowered that way. Insurance rates are another way you can save more money each month. Consider switching to another provider or lowering your monthly payment with a different plan. This can work for any type of insurance: car insurance, health insurance or even rental insurance. Finally, consider seeing if your car payment can be lowered by finding the best auto refinance rates available. You might be surprised to see how much you can save each month by lowering any payment you are making and cutting out the things you don’t really need.

What to do with all the Money You’re Saving

Obviously, once you are saving all this money every month, you can not spend it if you’re saving up for a down payment on a home! Open a savings account. Shop around to find one with the highest interest rate. Pay yourself out of every pay check. It is possible to do this by opening a savings account where you have your checking account and having a percentage or set amount transferred automatically. This way, you are saving the money before you even see it.

If you have longer to save the money, it is possible to invest it. This works best if you have the patience to invest over the long-term so you can avoid the ups and downs of the market. If not, by following this plan you can cut your costs and increase your savings toward your home down payment!