5 Things to Do with Your Down Payment When You’re Not Ready to Buy a Home

As a young professional, I am aware that money is of utmost importance. Whether it’s to pay off debt, to invest in my future or to use for travel, money management must be a priority in my life.
But here’s my question: after you’ve saved up some money, what do you do with that large sum (like a down payment) when you aren’t ready to invest in something permanent (like your forever home)?
* * * *

Pay Off Debt

If you’re not ready to buy a house, this is the next best option for any young person. You should definitely talk to a financial planner before doing anything, but what my husband and I learned is that paying off some (but not all) of our debt was better than paying off all/none of it. And so, after receiving professional advice on the matter, we used some of our ‘not-a-down-payment money’ to pay off some debt.


Leave It Alone

The easiest, and probably least desirable option, is to let it sit in the bank. This option won’t give you any huge returns, but to maximize on interest, be sure to transfer all funds from your checking into a savings account.

NOTE: If you don’t have at least 6 months worth of money saved up, leaving the money in a savings account is the best option since the money will be easily accessible, in case of emergencies.


Purchase Real Estate

If you don’t know where your forever home will be, consider purchasing rental property. Having someone else pay for your travels sounds incredible, right? Unfortunately, it’s not always as simple as a monthly direct deposit into your travel savings account.

Before investing in rental property (at home or overseas), make sure you consider the following:

– Can I afford to pay the mortgage if I don’t have renters for 1 month? 3 months? 6+ months?
– Who will manage the property when I’m away and how much will that cost me?
– Can I see myself living in this property someday or is it solely meant for rental purposes?

If purchasing overseas, what are the laws about foreign home ownership, taxes, renting property, etc.?


Invest in Your Future

Investing in your future could come in the shape of further education, contributing to a retirement account,  investing in your own business, or any other thing that will improve the quality of your life.


Play the Stock Market

This is a bit risky if you’re investing all of your savings but it can also yield lots of rewards. Before investing, talk to a few financial advisors to get a better understanding of your options, risks, fees, etc.


Whatever you choose to do, make sure it is meaningful and well thought out. There’s nothing worse than spending your hard-earned cash on unnecessary things.



* * * * A N S W E R  B E L O W * * * *
What can travelers do with extra money (other than travel more!)?
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