“With today’s home prices, saving money for a down payment requires a plan, discipline, and creativity,” says Alex Capozzolo, expert real estate agent.
The American Dream of being a homeowner feels distant. Aside from the doom and gloom that you’ll see in news headlines, there’s some truth to the odds that are stacked against hopeful homeowners trying to save money for a down payment. Wages are getting outpaced by inflation. Interest rates are high. Combine that with a weak dollar, and it feels impossible to save for a house.
Of course, not every money-saving strategy works for everyone’s situation. Regardless, there are creative lines of thinking that you can follow in this article that can hopefully help you reach your savings goals and, ultimately, your homeownership dreams.
Leverage AI via Side Hustles
An easy way to start saving more money for a down payment is to increase your income. Everyone will tell you to start a side hustle – that’s a common way to do it. How can we take it a step deeper, especially if you’re already slammed with your current job? Create a side hustle, or do an existing side hustle, with the help of artificial intelligence (AI).
AI continues to rock many industries almost daily with new, faster, more efficient ways to do things. Think about online, repetitive tasks that businesses are doing today that can potentially be automated. For example, data entry, customer support triage, and social media scheduling are common examples. You can set up AI-powered chatbots or automation workflows to handle these tasks. Once your setup is live, you can charge a monthly fee or bill per task completed.
Who would need or want to pay you for AI automations? Consider industries that may lack tech expertise. Local mom-and-pop restaurants or other stores could be easy wins! Pitch a simple solution to the owners and showcase how it adds value to them or helps them save money (or time). Results are powerful! Show them why it is a solution to their known or unknown problems.
You don’t have to be a tech wizard to do this. Platforms like Zapier or Make (formerly Integromat) make it easy to connect common apps without coding. Wild, right? Get creative with your thinking when considering what businesses you can help automate things, leveraging AI. You’ll save them time, and by using AI, you will also save yourself time in this side hustle. Once you put the pieces together, you’ll start saving more money each month and get closer to your downpayment goals.
Van Life
A common reason why people want to buy a house, especially if they’re still renting, is more space. Ask yourself this… can you stomach a smaller space for a bit longer if it means saving thousands of dollars that you can put toward your down payment?
Two words: van life.
Rent increases in the United States aren’t slowing down. This monthly expense is also typically the largest expense for renters. According to Consumer Affairs, median rent increased by 23.4% from 2020 – 2023 in the U.S. Yikes!
Depending on where you live, you could save thousands of dollars each month by not paying rent to a landlord while trying to save for a down payment. Yes, it’ll be tight quarters. But the trade-off is worth it if you’re serious about saving money for a down payment fast. Decrease your cost of living and start saving money each month. Remember your ‘big why’, which is buying a ‘big’ home.
Van life isn’t all that bad, right? With an uptick in remote working since 2020, it seems like more people are trying van life since the 70’s. Every day is a new adventure. You can explore nature, live in the mountains, or relax by the ocean – all from the comfort of your humble van abode.
You don’t have to spend hundreds of thousands of dollars on a brand-new RV. Check out Craigslist, and consider buying a used van that is a reliable vehicle. Don’t forget, your dream home will be awesome. It may just take some short-term sacrifices to save for that mega downpayment.
You’ll still have a bed, kitchenette, and storage in your van! Plus, you can increase your savings even more through solar panels. If you’re doing van life in a sunny state, take advantage of the sun to power your electronics with minimal to no cost.
Fortunately, van life also forces you to reassess spending on non-essentials. You don’t have a ton of space, so you cannot have a ton of things! Minimalist living reveals what you truly value and helps save money.
Negotiate Recurring Bills Systematically
Not ready for van life yet? That’s ok, it’s not for everyone. What are some other expenses that you may have some slight sway in? Make a list of every monthly expense you currently pay. Some quick examples:
- Internet
- Phone
- Streaming services
- Gym memberships
- Rent
Each of these expenses is ‘technically’ negotiable. Well, most things in life are – if you’re not afraid to ask! Make a list of providers and what you’re currently paying. Give each of these providers, vendors, or people a call and ask for a discount or better deal.
If you’ve been using a particular service for a while, there’s a chance that you’ll have some success at reducing these monthly expenses. There could be promotions that you can take advantage of that you weren’t aware of (why would they tell you themselves and lose money, right?). Maybe there are service bundling opportunities you can take advantage of, like internet and TV combos.
For those who want to go ham with this, you can even threaten to leave. That’s when bigger companies will likely deploy whatever savings options they can to keep you, if they really want to keep you. These opportunities sometimes rely on timing. For those trying to save for their next down payment, do this every quarter. You may be surprised at the golden savings opportunities you uncover.