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Today’s affordability pressures are holding back the most eager would-be home buyers. In a recent study by CoreLogic and RTI Research, young millennial renters under the age of 29 are the most enthusiastic demographic wanting to purchase a home in the next 12 months. However, one-third of millennial renters said they can’t afford the downpayment required to do so.
If the down payment is your potential clients’ biggest hurdle to buying, share some tips with them on how to meet their savings goals.
1. Investments. Investing may be widely used in higher income brackets and older demographics, but it’s often an intimidating practice for young adults just starting out. There’s also a misconception that you need a lot of money to begin investing, which simply isn’t true, Dave Nugent, head of investments at Wealthsimple, told Bustle. Wealthsimple, Swell Investing, Stash and other investment platforms are easy to use and allow users to start small.
2. Micro-tracking costs. Tracking every single monthly expense will help potential home buyers see precisely where their money is really going. This will also help them start to find unnecessary spending, according to Jennifer McDermott, consumer advocate at finder.com, in her interview with Business Insider.
3. Budgeting apps. Clients can take advantage of financial planning apps like Wela, Acorns, Mint, and Wally to alert them when they’re spending too much in one category and find additional ways to save.
4. Get rid of high-interest debt. Saving money is important, but if buyers are sitting on a mountain of high-interest debt, paying that down first is more crucial, according to Adam Jusko, founder and CEO of ProudMoney.com, in his Bustle interview.
5. Think twice before using credit cards. Consumers should never use a credit card like a bank account. If they can’t afford a purchase now or in the near future, “putting it on a credit card just kicks the can down the road,” Jason Reposa, the CEO and co-founder of MyBankTracker, told Bustle.
“Copyright National Association of REALTORS®. Reprinted with permission.”