Ways to Save Money for a Home

Because of the popularity of home mortgage loans that offer 100% financing or zero down, first time homebuyers are able to purchase their first property with little out-of-pocket cash. Even though a lender may not require a down payment, buyers need to have funds for additional costs such as settlement fees. Depending on the state, settlement or closing costs can be anywhere from 3 - 5 percent of the purchase price.

If looking for ways to meet this expense, consider four ways to save money for a home.

1. Don't Shop for an Entire Year:

You'll be surprise at the amount of money you can save within a year. If you were to completely cut out shopping for clothes, eating out, or paying for entertainment, you can potentially save $2,000 or more within 12 months. Of course, this is easier said than done. Even if you can't stop buying cold-turkey, consider drastically reducing your spending. For example, buy clothes from secondhand shops such as thrift stores or consignment shops. Additionally, before making a purchase, check and see whether a similar item is listed on EBAY or posted for sale in the local classifieds.

2. Pay Yourself First

After each payday, attempt to deposit a certain amount of money into a savings account. View the savings account as another monthly expense, and don't dip into the account. A small deposit of $50 a month will create a yearly savings of $600. If a couple saves money together, the yearly savings increases to $1,200.

3. Sell Personal Items

A great way to generate extra cash is to get rid of old items. Clean out closets, the garage, and the attic. Create a pile of unused items, and pick a date to have a yard sale. Do you have collector items? If so, consider selling the merchandise on EBAY. Finding items to sell can be as simple as driving around the neighborhood on trash day. Perhaps a neighbor placed old furniture or toys on the curb. Once items are placed outdoors for trash pickup - it's considered fair game.

4. Don't Finance a New Car

If you need a new vehicle, consider buying a used car and paying cash for it. Even if you can afford a new car payment, hold off until the home is purchased. Instead, deposit the extra money into a savings account. Once you've accumulated enough money to pay the closing costs, and have finalized the home purchase, now's the time to finance a new vehicle.