Saving for a Down Payment While Paying Off Your Student Loans: 5 Winning Strategies
How to Save, Even on Your Income
Life is about choices, but life can also be every expensive. Student loans are weighing down many people these days, and those loans aren’t something you can get around paying back. This leaves many people wondering, how do you pay off your student loans, have something resembling a life, and still manage to save enough for a down payment? Because without it, you can’t get into building equity – instead, you just end up watching the rental market eat more and more of what you earn.
It may seem like saving for a down payment while paying off your student loans is impossible. And, depending on where you live, it may be very challenging. But, if you have your heart set on owning a home, there is good news. With some effective strategizing and a bit of determination, you can save enough for a down payment while paying off your student debt. Here are five winning pieces of a complete strategy.
1 – Budget
Boring! Right? Budgeting is something your grandparents did. Budgeting may seem like a tedious chore, but it’s the first step toward that home you’re dreaming of owning, so you have to do it. It all starts with you getting your head wrapped around what life is costing before you can effectively know how much you can save.
Start here: find some cool online tools on your bank or credit union’s website to help. If your bank doesn’t have budgeting tools, it may be time to find a better bank.
2 – Automate
Once you know what you can save every paycheck, set it up with either your bank or your employer so you do this automatically. That way, you don’t fall into the trap of “I’ll save whatever is left over at the end of the month.” Furthermore, make it hard to dip into your savings. Set up a savings account with another bank that you only use for this purpose, so you’re less likely to dip in to cover expense overages.
3 – Bag It, DIY, Fix It, Whatever – to Save Money
Do things the old fashioned way. Seriously. If you can carpool or bike or walk where you go, now’s the time. If something breaks, fix it or mend it rather than throwing it away and buying a new one. Make your own lunch and bring it along with you to work. Find cheaper ways to entertain yourself – all of this savings will add up.
Remember: most of what is expensive about life are things you can probably make do without buying new or purchasing in the first place.
4 – Consider Taking on Extra Work or a Temporary Part Time Job
If you can work out a way to work a few extra hours driving for a ride sharing service, writing copy for an advertising agency, mending people’s clothes, or working a part-time job in the service industry, this can help you both earn money to save, and save money by having less free time to spend it.
5 – Play the Long Game
Saving money may sound dull, but you can try to game-ify the experience for yourself or with friends or family who may be in a similar situation. This is a long game, and the more fun you can make it, the better your results will be.
Remember, just like with anything else that requires discipline, don’t be so disappointed in yourself if you have a bad savings month, and just bag the whole thing. Keep your eyes focused on the prize, knowing what you’re working toward, and get back on track. Saving money can be almost as much fun as spending it, and it will eventually reward you in a much more profound way with home ownership.