July 9th, 2015
Are you feeling overwhelmed by the thought of saving up enough money for a down payment on a house? First, talk with a reputable mortgage loan officer to find out how much you could afford, and identify if there are any low down payment mortgages you could qualify for. That would put a box around how much you need to save.
That being said, make sure you ask about additional closing costs, fees, and insurance. You will get estimates, and you can plan on saving up a little bit more. Anything extra can be used towards a great dinner out to celebrate or some new furniture in your home.
Building up your nest egg doesn’t have to be difficult.
You need to have
And you should have
Sometimes we sign up for things and don’t realize it, or we forget. Now is the time to pull out your bills and look at them with a critical eye. Many people get signed up for “insurance” on phones that they don’t need. Also look at your data plan and actual usage.
Review your current insurance and see if you could get by with a larger deductible and lower payment. Also, consider shopping around and seeing if you can get a better deal.
And do you really need the full everything package for your tv programs?
The word “diet” is probably the only word that strikes more fear than the word “budget.” Both are really just a way of tracking what you’re spending. A budget is useful for identifying areas where you may not realize you’re overspending. And it can be a good tool for finding out areas where you may want to choose to spend less (dining out, morning coffee, happy hour with coworkers, etc.)
Online tools such as Mint.com, SpringCoin.com and PearBudget.com can help you manage your spending to save more on everyday expenses.
Don’t try to cut everything to the bone. Find compromises such as getting coffee one day a week, or cutting back on your cable but signing up for a streaming service like Netflix. It will take longer but it will be easier.
And consider saving less for retirement right now.
You may need to spend some money to save money here. If you really don’t know how to cook, look into inexpensive classes through your community center. You could also take classes through stores such as Sur La Table. Get a simple cookbook and practice. You can also check out cookbooks from your local library. You will need some basic supplies such as a good knife, a frying pan, and a pot with a lid. The more you can eat at home, the more money you will be able to save. Plus, when you do eat out, it will feel like a very special treat.
You may want to consider finding a cheaper place to rent while you’re saving up for the down payment.
You may want to consider taking a part time job on the side and put all of that money into your house fund.
Find free activities like hiking.
First-time homebuyers can cash out up to $10,000 from an IRA without having to pay the standard 10 percent early withdrawal fee. If you’ve been saving in an IRA, check your balance, and consider cashing out part of the money to put toward your down payment.
Find low cost activities such as renting a movie from Redbox instead of seeing it in the theater.
Sell extra stuff on Craigslist or eBay and put that money into your house fund.
Evaluate your cars. If you’ve paid it off, look into holding onto it. If it’s a really expensive car to maintain, consider selling it, paying off what you still owe and look into an inexpensive car. You want to find one that is low cost to maintain as well as to service.
Put aside any chunks of money you get such as gifts, tax refunds, and bonuses. Even consider putting aside the extra money if you get a raise.
And the most important thing of all is to keep track of how well you’re saving while at the same time pretending that it doesn’t exist so you’re not tempted to dip into it. Consider having two savings accounts. One for your emergency fund, and the other for your home fund.