Many young adults dream of becoming homeowners, but whether they'll actually get to achieve that goal in the near future is iffy. An estimated 89% of millennials would like to purchase a home, or so says a survey by the website Apartment List. But most younger Americans aren't anywhere close to saving up the 20% down payment that's often a requirement for buying property.
In fact, nearly half of millennials have no money saved at all for the purpose of paying for a home. And of those who do have some savings, only 11% have $10,000 in the bank toward buying a home. As such, Apartment List projects that it will take roughly 67% of millennials more than 20 years to save enough to put 20% down on a home, meaning that younger millennials might not achieve that milestone until their 40s, while older millennials might not get there until their 50s.
If you're a millennial who is serious about becoming a homeowner, you'd probably rather not wait until your 40s or 50s to buy. Here are a few ways to ramp up your savings and reach that goal sooner:
1. Start following a budget
Once you get a better sense of where your money is going, you'll be in a stronger position to boost your savings. To that end, you'll need a budget to track your spending. Creating a budget is easy -- all you have to do is list your recurring monthly expenses, factor in one-time expenses (like annual subscriptions), and compare that total with the amount in your paychecks to see how much you can conceivably save on a monthly basis. If you're happy with the number, then all you'll need to do is stick to your budget and wait to achieve your total savings goal. If you're not happy with it, you'll need to cut back on some expenses to get there faster.
2. Keep your housing costs low until you're able to buy
If you're like the average millennial, housing is probably your single largest monthly expense. By reducing it, you'll free up a load of cash that could eventually become your down payment. You can lower your housing costs by downsizing to a smaller space, moving to a less trendy neighborhood, or getting a roommate or three to split the rent with. Another option? Consider moving back in with your parents. If they are willing to let you live rent-free for a while, that down payment could be yours in no time.
3. Get a side job
If your current paycheck isn't helping you reach homeowner status as quickly as you'd like, a side hustle could be just the thing that gets you there sooner. Since the money you earn from that second job won't already be earmarked for existing bills, you should have no problem saving all of it for your down payment. And that side job doesn't have to be something you hate -- you can turn a hobby into a moneymaking opportunity and save for your down payment that way.
Homeownership offers a number of benefits, from tax breaks to stability to getting to call the shots rather than answer to a landlord. If you're eager to become a homeowner while you're relatively young, make an effort to ramp up on the savings front to amass that down payment. Otherwise, you might find that homeownership is a goal you're inevitably forced to keep postponing.
The Motley Fool has a disclosure policy.