How to Save for a Down Payment

One hundred dollar bills

Do you have future plans to take out a loan for a major life purchase, such as your dream car or a new home? Depending on your lender, you’ll likely be required to make a down payment. Whether small or large, saving for down payment can be a daunting task for many individuals. If you’re struggling to get started, join Xpress Cash as we cover some of our best tips for how to save for a down payment!

Tips for How to Save for Down Payment

Saving for down payment may feel stressful now, but it will be more than worth the effort in the future, when you finally get to move into your dream home or pick up the keys to your brand new car. Here are some helpful ways to start saving for your down payment today, and reach your goal faster:

  • Set Up a Savings Account with Direct Deposit: The simplest and most common way to start saving for a down payment is to set up a savings account with an automatic direct deposit feeding into it.
  • Cut Unnecessary Expenses from Your Budget: It’s not exactly fun to lay out all of your monthly expenses, but when you do, you’re likely to spot some areas you could cut back on right away, i.e. frequent fast food trips, unnecessary clothing or accessory purchases, etc. If you want to get really serious in this area, you could also consider pausing things like gym memberships and TV streaming services.
  • Tap Into Your Retirement Plan: Saving for a down payment on a home? Some retirement plans allow you to borrow money from your account and redirect it toward your new home purchase. Before you move forward with this option, just be sure to do your research to see if there are any potential penalties involved.
  • Cut Down on Vacations: Even if you don’t take any vacations for just one year, you’ll see a significant amount of money saved. 
  • Start Paying off Credit Card Debt: Credit card debt makes it very hard to save up for anything, let alone saving for down payment. We all like to pretend it doesn’t exist, but rather than ignoring your debt, starting to pay it off will put you in a significantly better position to start saving.
  • Pick Up a Side Hustle: It’s hard to fathom taking on a second job when you’re already working full-time, but this doesn’t have to mean taking on additional part-time hours with a company that’s hiring in your area. You could look into driving for Uber or Lyft during your off hours, become a dog walker, sign yourself up on a food delivery app – these days, the possibilities are endless! The best part is you can set your own hours, so earning some extra cash whenever it works with your schedule is easy.
  • Sell the Items You No Longer Need: Unless you’re an extreme minimalist, you probably have a decent amount of old clothes you no longer wear, furniture you no longer use, toys the kids no longer play with, and more lying around the house. Spend the weekend sorting through your odds and ends you no longer have a need for, and prepare to sell them. Whether you set up a garage sale, list everything on an app, or bring it all to a secondhand store, you’ll be able to pocket some extra cash and put it toward your down payment.

Visit Xpress Cash for Additional Help

If you have any remaining questions about how to save for a down payment, we welcome you to contact us online or visit us at any one of our Michigan locations. Our finance experts are always here to help, providing the advice you need on saving money, getting a lower down payment on your house, and more!