Using Coupons Wisely Helps Boost Your Savings

Whether you’re trying to balance your household budget or save money to buy your first house, discount coupons can help.

Coupons alone are not a panacea that will cure budgetary woes or enable you to quickly save up for a real estate down payment, but they can play a role in achieving your financial goals.

Building up your financial nest egg or saving thousands for a down payment requires planning, organization, and motivation. While this may sound like a steep mountain to climb, the biggest challenge involves examining your values and overcoming self-limiting habits and beliefs. If you’re convinced, for example, that it’s impossible to save money and get ahead, then those beliefs will slow you down, if not sabotage your progress, completely.

There are a lot of reasons why discount coupons are not an effective money-saving strategy for many people, but it often boils down to three things:

  1. Disorganization: Although coupons are a marketing tool used by businesses to get consumers to buy more products and services, it’s often a “win-win” situation. If a coupon happens to be for product that you need or would ordinarily buy, then it’s like having extra money in your wallet. For some people, putting the coupons IN their wallet is a good way to make sure they have them when they’re at the checkout counter or drive through.
  2. Pride: There’s nothing undignified about using coupons, unless you have such a large stack of them that you’re causing people behind you to roll their eyes, sigh loudly, or grumble under their breaths! And speaking of misplaced pride: If you’re over 60, don’t hesitate to claim your senior citizen discounts at restaurants, the theater, movies, public transportation, museums, car rental places, and hotels. Those savings can really add up!
  3. Lack of planning: When your trips to the grocery store are planned, rather than sponteous, you’re a lot more likely to remember your coupons and your shopping list. By having your coupons with you and knowing what you need to buy, you’ll be more focused and tend to spend less money on impulse items.

Effectively managing your household budget or saving money for a house down payment is usually the result of multiple strategies, rather than just using coupons or doing comparison shopping. One of the first steps to gaining control over your finances involves examining your cash flow situation. Itemizing your expenses and deducting them from your income will give you a clearer idea of where your money is going and how much you have left at the end of the month. By listing your expenses and disposable income, you can often identify “leaks” in your cash flow and find ways to stretch your dollar farther. When you assign yourself the job of “gatekeeper,” you’ll be surprised at the many ways there are to tighten your belt, without making major sacrifices in your lifestyle.

Four Ways to Save for Your First Down Payment

It’s a difficult time to be a first-time home buyer. Post-recession buyers are wary–and for good reason–of how and when to save money for a down payment on a house. One thing to remember, however, is that it’s always a good time to start saving.

In this article, we’re going to cover the four most useful methods of saving for a down payment on your first home. That way you can feel confident in taking the first and most important step toward homeownership.

Choosing the right savings account

Unlike riskier investments, a savings account is a safe and proven way of building interest and saving for a home. However, not all savings accounts are created equal.

Typically, brick and mortar banks offer interest rates that are low–the current national average is only about 0.06% annually. While these banks offer conveniences such as in-network ATMs and check-cashing, their physical locations make them expensive to run.

Enter the online bank. Since online banks don’t have all of the costs associated with running branches, they can afford to offer better rewards–namely, high-interest returns on your savings accounts.

So, should you take all of your money out of your current savings account and transfer it to an online bank? Maybe. But let’s talk about the benefits of having multiple savings accounts.

Open a dedicated account with automatic deposits

Saving isn’t just difficult due to financial reasons. Managing money also takes time and effort. To simplify this process, it’s preferable to direct deposit or automatically transfer a percentage of your weekly income into your down payment savings account.

While it may seem like pinching pennies at first, even small weekly deposits add up, and within a few years the compounding interest can earn you enough for a higher down payment than you thought possible.

Prioritize high-interest debt now

Have student debt or a car loan that’s keeping you from focusing on saving for a down payment? Oftentimes the best coarse of action is to aggressively pay off high-interest loans. In the long term, this will save you money that can then be used toward a down payment.

For debt that will take several years to pay off, consider refinancing for a lower interest rate, or consolidating your student loans. Speaking with a student loan adviser or financial planner is a good first step to take toward managing your debt.

Make a real budget

Most of us think of a verb when we hear the word “budget.” However, it’s more useful as a noun.

Creating a real budget, whether it’s in Excel, Google Sheets, or with the help of an app, having a budget you can refer to once a week is vital to making good savings decisions. It will help you monitor your spending and stay on top of your savings goals.

How to Save Money for a Down Payment

Saving money is never an easy task. And saving money for a down payment on a home is especially difficult. Between trying to pay down debt, whether it is student loan or credit card debt, a car loan, insurance, rent, spending money and trying to save for retirement and your emergency fund, how does that leave any money left to save for a down payment? Let’s take a look at a few smart ways to save for a down payment.

First things first: how much you are able to spend? This will determine how much you need to save— 20% of the total home cost. Once you have that figured out you can begin to plan what it will take to save that amount. It should be your goal to save 20% or more, although there are ways around that number.

Cut expenses: Cutting expenses is one of the ways to start saving more money. First, take a look at the things that you spend money on each month that you don’t necessarily need. Do you buy groceries and then go out to eat 3 or 4 times week? Cutting down to only going out once a week will save you some big bucks at the end of the year. Can you cut down on any of your utilities such as cable and Internet? What about your rent? Could you get roommates to alleviate the cost of rent or move to a lower cost apartment?

Invest: Investing your money, smartly, is the quickest way to increase your money and build your down payment amount. Investing, in general, will not make you crazy amounts of money really quickly (unless you’re one of the lucky few) but it does add up faster than money sitting in your savings account or under your bed. Consider opening up a CD, an IRA account (there are restrictions), or investing in the stock market. It will take a couple of years for this to really build, but the returns will be worth the wait. Be sure to read up on the best option for you and keep an eye on the market if you are planning on investing in an IRA account or stocks.

Automate Savings: If you have the funds but just aren’t the best saver then the easiest way to save more money is to automate it, either through your work or bank. Automating your savings will make it seem like that money was never there, therefore making it easier to forget about it and keep it in savings. You’d be surprised how quickly your money can add up.

Additional Income: If you really want to speed up reaching your savings goal then you may want to consider adding another source of income. There are so many ways to earn more money such as selling your crafts online, blogging, a second job, etc. Saving all of the money you earn will expedite your savings. There are also other sources of income such as a bonus, or tax return that are not a part of your regular income. These types of income should also be saved towards your down payment to reach your goal sooner.

If purchasing a home is of utmost importance to you, but you are lacking the down payment then it is extremely important to make saving a priority. As detailed above, there are many ways in which you can accelerate the process of earning and saving more money.