A good strategy to start saving money for your next down payment would be to make saving money a habit. It may sound like basic common sense because it is. But to practice prioritizing saving over spending can be difficult. Delaying unnecessary purchases and sticking to a budget can be difficult, but the only technique to save significant amounts of money is to set specific goals, make a plan, and then stick to it. It would also reduce stress if you automate your savings.
Many employers will let you deposit part of your paycheck into multiple accounts. If you are in luck, take into account opening a higher-interest savings account and then having a percentage of each paycheck deposited into it. By designating automatic transfers into your savings account, you are less likely to use the money for unnecessary things. Even 1% of the additional interest can add up over the long term.
A great strategy to increase your savings is to pay off your existing debt. One effective way to look at it is that every month that you are making debt payments, you are not using that money to save for your next property. When all your debts are paid off, you will realize how much more of your monthly income is left over when it is not being consumed by paying off debts and interest. That doesn’t mean that you cannot use your credit cards. Many cards now offer cashback rewards for using them each month, which could just help you save even bigger amounts. Always be reminded to only spend what you can pay off each month.
If these are not your cup of tea, try reducing your monthly expenses. An effortless way to do so is to eat out less often. Cooking your meals at home can save you hundreds of dollars each month. You can also shop around for better rates on the internet and phone service, cable service, car insurance, and more. You may learn that it is possible to switch to a lower-cost service or even lower the cost of your current services by calling your providers. The amount you save, even if it is only a small amount, should go directly into your savings account. This is applicable for any unplanned or infrequent sums of money, such as bonuses, gifts, tax refunds, and so on. These will help you reach your savings goals quicker than usual.
One more thing, a super effective way to save up for a down payment would be to set short-term goals. While you may need $20k or $30k to buy your next investment property, using that number as your goal is not going to be as effective as creating smaller, achievable goals. For instance, you can start by choosing to save a certain amount each week or each paycheck, even if it is $25 or $50. By focusing on the short term, you can increase not only your savings account but also your sense of accomplishment. Everything positive that you do about your savings is only going to benefit you and your investment portfolio in the end.
When it comes to savings… whether or not you have one investment property or several, Real Property Management Corazon has a tailor-made solution to fits your paying capacity. Contact us through the web or ring us up at 775-826-1414 to talk about our flexible management contracts today!