Saving for a down payment can be less about how much you can afford to put away than about what you spend your money on. Many fees, for instance, are expenses that are easily reduced without compromising your current lifestyle. The fewer you pay, the more cash you’ll have available to add to the down payment cause.
Where to Begin
Here are some ideas for where to find fees that can be negotiated, minimized, or eliminated altogether.
Ask your personal banker about ways to reduce any fees you are paying on your checking account, particularly if you have been with your bank for a while. Be sure to mention you are saving for a down payment. The more services you use and the more money you have with a bank, the better your negotiating power is regarding fee reduction. Even if you receive a concession on your fees, stay focused on managing your balances. Avoiding fees for overdrafts and bounced checks is quite savings-friendly.
Credit Card Fees
Call your issuer and request a reduction of your annual fee in view of your history of consistent and timely payments. The alternative, which your issuer knows, is to transfer your balances and relationship to a different card issuer offering lower or no-fee accounts. Similarly, if a payment does arrive late, request a reversal. Generally, issuers are accommodative; they want to avoid losing business to a competitor over an occasional late fee.
Loyalty adds up. Whether it is at a local store, restaurant group, or major airline, signing up to receive points is a way to get a little more out of each expense. When you are asked to pay a fee to join a program, however, look long and hard at your break-even point, which is where the benefits you would gain exceed the fees you will pay. Programs like Amazon Prime, which offers free shipping that often pays for itself at holiday time, are good examples of this.
Many museums and galleries offer regular free admission days. They tend to be more crowded on those days, but this can save your family enough to pay for lunch after a visit. You will also avoid the handling fee often charged for mailing tickets. Becoming a member of a museum you frequent can also save you and your family money since attendance is free and, often, a portion of the membership fee is tax deductible.
Cutting Other Expenses
Whether it’s your cell phone, Internet, cable, alarm-monitoring company, or satellite radio subscription, monitor your bills and periodically call to ask if they can be lowered. Often, especially if you’ve been a loyal customer—and make timely payments—the company will be able to find an incentive that can be applied to your account.
With every fee or bill that you cut—or incentive you earn—make it a point to match that amount with a deposit to your down payment savings account. The amounts may be small, but you’ll be surprised by how quickly each of these financial victories can add up.