3 Ways to Save a Down Payment for a Rent to Own Homes
There are many great ways that you can save for a rent to own home, but we have put together a list of what we think are the three best ways you can save for a rent to own down payment. Many people find that once they have achieved their first goal, these strategies help them achieve their other financial goals as well. So they keep on following them. It all depends on how motivated you are to accomplish your financial goals. Here are our tips.
1. Pay off your high-interest credit card debts first
You can’t really save money if you are paying a lot of interest to a bank. The first thing you should do is pay off all of your debts. Start with your high-interest debt, and pay it off. Then take the minimum payment from that debt and use it to help you pay off the next debt that has the highest interest rate. Once you have that one paid off, the two minimum payments that you use to pay for those smaller debts can help you pay off your next debt faster (again choose a small debt with a high-interest rate). You will notice a snowball effect as the minimum payments you are freeing up help you to make larger and larger payments against one debt at a time. This is one of the fastest ways to pay off debt.
2. Get rid of one car
You have a partner and you have two cars, consider getting rid of one. This can save you thousands of dollars per year. You can move closer to where you work or where your partner works. You or your partner can look at walking, take transit, carpooling or even cycling to work (weather permitting). If you can make this work, you can potentially save one car payment every month, plus gas, maintenance and insurance. This adds up very quickly into some big savings. Try to bank all of this money if you can. If you don’t want to go cold turkey on this idea, try parking your car for a couple of months first to see if it works for you. Then sell your car once you see that it does work.
3. Look for cheaper ways to do things
This is how smart people save a lot of money. They make a lifestyle of finding cheaper ways to do things without diminishing their fun. Here are some great examples:
Do you buy a lot of new books?
Try the library. They have zillions of books that you can borrow for free.
Do you go out to a lot of movies?
Try renting or sticking with cable. Some people are now even dropping their cable in favour of watching shows online. This works really well in the U.S., but it is getting better in Canada.
Do you eat out a lot?
Try eating out less or look for cheaper places to eat that you still like. You can also look for 2 for 1 coupon or buy an Entertainment Book and only eat at the places that have coupons (this will cut your eating out the budget in half).
Do you spend a lot of money on your hobbies?
Try spending less or finding other hobbies that cost less—at least for a while.
Do you buy a lot of new clothes?
Try sticking with your current wardrobe for a little longer, or selectively buy clothing items that coordinate with what you already have. This will allow you to put together more outfits with fewer clothes. When you buy your clothes, look for sales.
Do you take expensive vacations?
Try something less expensive or closer to home.
If you have a busy family, you can really save money if you eat at home more often (and this includes buying fewer snacks and drinks on the run), and look for fun things to do around your community that are free or don’t cost very much. If you go to the movies a lot, try renting. If you rent a lot, you could save even more by checking out the library. Many libraries have videos you can borrow for free. This option is really great for kids.