How to save to buy a home?
Date: December 10, 2015 Author: Tarah Harris
How long have you been renting? Have you ever wondered, Man I should be paying a mortgage for the price of this place…
If that’s how you are thinking, join the club. The housing market is coming back for buyers, and many people are making the leap from apartment to home. But the difference between wanting a home and getting a home normally comes down to money.
What a shocking thought. Money is preventing something who would have ever guessed it. But with student loans, that big Nissan Altima car payment and that Macy’s charge card who has savings. Then you think of rent, a job that isn’t paying you what they should and health insurance many millennials are just barely getting by. We may look good, but are just hanging. So saving money for a home always tend s to find its way on the to do late list.
While you won’t earn enough money for a down payment solely by cutting up your ordering one less drink at TGIF, buying a place of your own is totally achievable if you take some serious steps toward improving your financial fitness.
Whether your dream home is a colonial on the West End of Henrico or a condo in Shockoe Bottom, it’s time to stop spending and start saving your hard earned dollars to buy the home of your dreams. So here is how.
Let's be real
I have seen many home buyers want more than they can afford. Stay off Zillow, Trulia and out of open houses until you know what you can afford. Don’t go for Trump Plaza right away. There are plenty of nice Marriot’s around.
Cut out the extra
Over spending is never done on one large purchase. It is normally the small things. Like having Netflix, HBO and still stopping by the Redbox. Its cutting the Macy’s coupon just to spend more at the register. It’s getting a dog then realizing you may have to actually feed in real food, not Alpo. Even I am guilty of checking Groupon daily for a must buy.
Think of the Starbucks theory. If you skip the best coffee in the word and start brewing at home you will save $1,000 bucks right there. That makes a difference when you need a 8,000 down payment. Then cut out going to lunch and that may save you another $2,500/yer. Just think you have already saved $3,500 towards your downpayment.
LIVE OFF OF ONE SPOUSE’S INCOME
If you’re married or are planning to buy a home with a significant other, try living off of only one income. If you can swing it, setting aside one partner’s paycheck for the house fund is an amazing way to watch your savings account grow at lightning speed. If you can add another job or some additional income.
THINK ABOUT TAPPING INTO YOUR IRA
If you’re a first-time homebuyer, you can use up to $10,000 of your IRA funds to buy a home. Are you married to someone who is also a first-time homebuyer? You can both withdraw from your IRA funds for a whopping total of $20,000. That’s a good chunk of change! Just make sure you consult with a financial expert.
SAVE YOUR TAX RETURN
I know better than anyone what you can do with a little ta return money. A Kate Spade bag here, an Alex and Ani bracelet there and cute new jacket for my dog Louie. But lets try some disciple. We can do it together by putting that money into our savings account and try to leave it alone for 30 days. By day 35 you will have forgotten it was there.
Good luck with the savings!