April 8 2015

How to Save for Your First Home

by racheal

Tips to Save for Your First Home

Saving for your first home may be one of the most difficult feats you conquer as an adult. Here are some great ideas for everyday little things you can do to fund the down payment on your first home.

1.    Track Your Spending Habits. Create a daily log of EVERYTHING you spend. You will be surprised at how quick your little purchases throughout the day can add up over the week. For example, according to ABC News, the average American spends nearly $14.40 a week on coffee, which ends up to $696 a year! That is $696 that can go towards your down payment in just one year.

2.    Eat In. Eating out is expensive; just think how quick your bill for two turns into $50 after two entrees, drinks, tip… You will save more money by cooking at home and will be less likely to go out to dinner if you already have meat defrosting or a crock pot waiting for you. If you brew your own coffee (buying coffee out: $4), pack a lunch (eating out: $12) and prepare dinner (eating out: $12) at home you can save an average of $28 a day. That is $196 a week, $784 a month and a grand total of $9,408 a year!

3.    Just Say No. This can be a hard one. We all want to make our family and friends happy and hate to turn down a good time. But you are on a budget, and saying yes to every opportunity that comes your way is just not reasonable. Plan out what you can spend on activities for the month. This will make it easier for you to turn down a friend’s birthday party or a family outing if you already know in advance what you can afford. And be honest with them! Let them know you are trying to buy a home and are on a budget. I bet they will understand and, more often than not, they have been in the same boat as you.

4.    Side Work. This does not mean you have to get a part time job, although if you can, go for it. However, you can use your skill set to find some side work. There are tons of freelance websites that allow you to advertise your skills and will help you find a side job that fits your time and abilities.

5.    Cut Out the Extras. As in the first tip you read, writing down your monthly bills will help you find unnecessary spending. Cable is a big one. Many people either pay for plans where they don’t even watch half the channels they are paying for or have both cable and subscriptions like Netflix and Hulu. Cancel any memberships you are not using often, like the gym, warehouse memberships like Costco or magazine subscriptions. I bet if you put your mind to it and get creative you can save nearly $200 a month.

Stick to your budget and get motivated to work on that down payment for your first new home!

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