Many people ask us how they can save for a down payment for their new home. This is a tough one because the answer isn't what people typically want to hear. The truth is, saving means sacrificing. Sometimes, you have to forgo the things that bring instantaneous gratification so that you can afford the property that will keep you happy for a long, long time.
Closing costs in Cayman range anywhere from 15%-50%, varying in large part to what the bank requires you to put down for a deposit. So it's hard to know exactly how much you'll need until the time comes. The problem reminds us of a concept learned at a seminar: the "latte effect." When you think about going to your favorite coffee shop for a drink early in the morning, it makes perfect sense; but when you look at it in the long run, spending $7 five days a week ($1,820 a year) is a fair amount of cash that could be allocated to better use...
Saving for a down payment comes down to making a series perhaps of small and large compromises. Instead of indulging at the coffee shop every morning, save money by brewing some at home or ween yourself off it altogether. I'm not trying to micromanage your finances - we just want you to start thinking about the little things you spend money on that could be going toward a more worthwhile investment.
The key is to focus and be patient. You may even find that these little compromises make you feel better!
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