Good credit? Earn good money? But nothing saved for Down Payment?
I know there are many aspects of buying your first home that can be frustrating, one of those on the list…not having the funds for down payment. Well, I know in this day and age it is hard to save money, however, there are certain lifestyle changes that we can all make to save more money, as I am speaking from experience!
Where to start on saving money?
The best way to start would be to sit down and take a serious look at your bank activity. Are you going to Starbucks? Are you eating lunch & dinner out every other day? I had to take a serious look at this myself years ago and this has continued to help me as it has become more of a lifestyle; making my own coffee each morning, using leftovers from dinner the night before OR buying lunches for the week. This may seem a bit tedious but the quicker you start to learn where your money is going then the sooner you can learn how much easier it is; I know Dave Ramsey has taught the “envelope method” (https://www.daveramsey.com/blog/envelope-system-explained) of savings and this can work if you are disciplined.
Starbucks 5 times a week = $25 x 52 weeks in a year = $1,600
Coffee maker ($50) & bulk coffee ($25/month) = $350
You don’t need me to do the math on eating/drinking out vs. buying groceries/beverages to make a point on this; yes it is nice to budget in going out once in a while but once you start seeing how you spend your money and find a way to reduce your spending. Once you do this you may be able to see countless other ways to save money.
What are your goals and your timeline?
What makes the difference is what is your goal to buy a home, 6 months, 1 year, 2 years? Whatever that timeline is for you can depend on how aggressive you want to get into cutting your spending. The best thing you can do is chat with your lender to see what your loan options are. From there, you can determine how much you will need for down payment, costs, etc. There are many different programs for which your lender can help to guide and educate you through.
Keep in mind that this can go beyond your daily expenses. My family and I decided to “cut the cord” on cable a few years ago and have never looked back. Essentially this will come down to what are you willing to reduce in your life in order to make your dream of buying a home attainable? Not everyone is meant to own a home and there is nothing wrong with that, however, if you are determined to make it happen, then you will.
As always if you have questions or need resources for this we are here to help and sit down with you. One thing to find in a lender, make sure they have your best interest in mind, do they care? Are they willing to guide you thru the process no matter how long that takes you? We value ourselves on being honest, transparent and trustworthy, give us a call if you would like to learn more.