5 Ways to Save For Your Next Investment

If you’ve been following our blog at all, you know that investing in a real estate is an excellent method for building personal wealth. But what happens when you want to invest, but you don’t have enough capital to get started? Well, you have a few options actually. You could find a partner who does have the cash and split the profits with him/her, or you could look into private loan options, or even become a wholesaler. But for the people who simply want to create their own nest egg and start their investment adventure the old-fashioned way, saving is the way to go. Here’s how to do it:

1. Give yourself a budget and stick to it. If your end goal is to save x dollars so you can buy your first property, you need to start with a financial plan that will allow you to put some money aside each month. Let’s say you plan to spend $75,000 on your first property, and you want to buy it within 2 years. At this price, and with 20% down, you’ll need $18,750 in savings. Over the course of 2 years, that means you’ll need to save about $780 each month. Now that you have a target in mind, you’ll need to create a budget that will give you $780 in wiggle room each month. List your income and expenses, and see what you come to. If you need to make cuts or increase your income to make that $780 happen, then do it.

2. Open a separate savings account. You’re going to need a place to put all this extra cash, and your existing checking account is not the spot for it. Go to the bank and open a separate account just for your down payment savings. Link it to your checking account, and transfer the excess cash to savings frequently.

3. Save any extra cash. If you happen into any extra cash over the course of your savings spree, throw it into your savings account. This includes tax refunds, birthday or Christmas gifts, annual or quarterly bonuses from your job, whatever. This is easy money, so to speak, and it can help out big time in helping you reach your down payment goal.

4. Add to your income. Another option is to boost your income so you’re pulling in more each month. If you can, take overtime shifts, put in more hours at work, and look for odd jobs or ways to bring in passive income.

5. Draw from your paycheck. As your surest form of income, your paycheck is a wonderfully reliable way to ensure you’re adding to your nest egg each month. Determine what percentage you can reasonably do without each pay period, and set up that amount to be direct deposited into your savings account.

Saving isn’t always easy, but if you’ve got a goal in mind – like buying a rental property so you can start investing in your future – you’ll probably find that putting extra cash aside is easier than you think. Stick to your plan, stay focused, and before you know it, you’ll be signing the papers on your first investment property.