Saving a Down Payment

As you recall from previous posts, my wife and I have started to make more money than ever before. Between her raise and my income from my blog, we finally have a little bit of extra cash without looking under the couch cushions. It’s a nice feeling, yet at the same time, I know that I need to keep directing our extra cash towards financial goals of ours. If you have been following my blog for any time, you know that financial goals are important for me because it keeps me working towards something instead of having cash burning a hole in my pocket.

A New Savings Goal – Down Payment for a House

Just recently, my wife and I talked about where we will go after she finishes with her graduate degree. Nothing is set in stone, but we don’t see ourselves in the greater NYC area for long term. With that said, we realized that as long as we don’t move to an equally expensive location, we will be able to afford a house if we save for it now. First, I needed to set a figure amount because it helps me keep track of my progress. Using a mortgage calculator that I found online and the common knowledge that I will need about 20%, it is easy for me to figure out how much we need to save for a down payment.

What Saving Now Offers Us

While many of my friends spend their extra cash on drinks or going out to party, my wife and I are going to choose to put money away for our future.  While it may seem like it to many, this doesn’t mean we are missing opportunities to enjoying our lives now. It just means we are establishing our future as a priority. It allows us some flexibility with our future mortgage. While some may be forced into a mortgages that cost them big time or interest only mortgages, we will have option of choosing the best one for us because we will have a large down payment for a house after only a few years. This means we will have a smaller loan and more options.

Taking time to establish some priorities with your finances can allow yourself some flexibility in the future. Find out what is important to you, set tangible goals, and work hard to accomplish it. That’s what we’re doing.

This post was provided by Emortgage Calculator.

6 Responses to Saving a Down Payment

  1. Congrats on setting that new goal! I have to admit that I am jealous that you are saving from high-cost-of-living salaries to move to a lower-cost-of-living area. Your money is going to feel like it’s going so far! We are planning to go the opposite way, which is part of the reason why we haven’t started saving for a down payment yet. :/

  2. Saving for a down payment is a back-burner goal for us — money goes into it every month, and it’s adding up, but right now our urgent focus is on the wedding (in October) and my graduating debt-free with my Master’s. In a few years we’ll be ready for a house of our own — a smaller one in our high-COL area.

  3. Good job setting that savings goals. Once you start to have extra cash it is very tempting to just increase your cost of living and spoil yourselves. It is the more responsible decision to save for a mortgage down payment instead. As long as you maintain your current lifestyle, you should reach your goal in no time.

  4. When I started to save for a down payment, I got a second job and put all the extra money earned toward a savings account. I was accomplishing 2 things at the same time:
    spending less (because I was busy working!)
    not cutting on my lifestyle much and gather a lot of money 🙂

  5. The trap that we got into when we started saving for our down payment was that we then couldn’t/wouldn’t touch it when we were short on cash for other things. I could have paid off my medical bills with the down payment money, but then we would have been stuck trying to find another place to rent until we could save up our down payment fund again.

  6. […] For example, my wife and I are currently saving for retirement (as we always do), but also for a down payment on a future home. As you will recall, mathematically speaking, temporarily ignoring retirement to […]