The Best Secrets To Saving Up FAST for your First Home
Finding the perfect home is no easy feat. But when you find it, it just feels right, and you know it’s the home for you. But there’s just one “tiny” problem holding you back: Money.
Every home comes with a price tag. The listing price, closing costs, property taxes, homeowners and mortgage insurance, appraisals, inspection fees, etc. And don’t forget the down payment. Depending on the type of loan you get, it may require a larger down payment between 10-20 percent.
To many, purchasing a home may seem like a dream that is too far out of reach. But in reality, there are countless ways future homeowners can cut back to help them save money now.
1. Create a Budget
One of the biggest problems Americans struggle with is creating a realistic budget, and following it. According to financial experts, if the home you’re wanting has a monthly payment that is over 25% of your monthly income, it’s not realistic. Find a home in your price range before your dreams are dashed.
2. Stop Eating Out
If you’re tracking your expenses, try looking at how often you’re eating out— whether it’s a cup of coffee or a quick fast food lunch, those items add up quickly. According to a report from the Bureau of Labor Statistics in 2017, The average household spends $3,008 per year on dining out. That’s about $250 a month you could be saving!
Instead of eating out, try doubling your recipes and eating your leftovers throughout the week, or freezing them for another time.
3. Cut out the Extras
In other countries, things like cable and hair appointments are considered a luxury. They’re not necessary to survive. Sit down and add up how much money you and your partner are spending on getting manicures/pedicures, lash extensions or fills, getting your car washed, tanning, magazine/newspaper subscriptions, club/ gym memberships, etc. What can you eliminate or cut back on? Can you replace a hefty cable bill with Netflix, Hulu, or Sling? Sometimes, you can even try bargaining with their customer service reps to get the price down.
4. Switch your Cell Phone Plan
Depending on your phone plan and how much data you use, you could be paying too much for your service. One study found that the average American spends between $60-$80 a month for an individual cell phone plan. However, there are many other companies that offer similar plans for a fraction of the price. A little research can go a long ways. Companies like PureTalk, FreeUp Mobile, Republic Wireless, and Tracfone may be able to help you save a lot of money each month, all without an annual contract. Many of these companies also use the same cell towers as your current provider, so the coverage is the same.
5. Utilize the Classifieds
You’re planning on moving anyway, so why not get rid of your clutter now? Sell your unwanted items in online classifieds. Experts say that decluttering can also improve your mental and physical health as well. Nothing like getting healthier and making some extra cash while you’re at it!
6. Pay off Debt
Believe it or not, paying off your debt will help you save more money (at least down the road). Start with paying off your smallest debt first, and doing the minimum payments on your larger debts. Once the smallest debt is paid off, move to the next larger debt and pay as much as you can with that. By the time you reach your largest debt you’ll have snowballed your smaller debts into your largest one. And once you’re debt free, you’ll really start piling away the bucks for your down payment.
7. Be More Efficient
Being more energy efficient around your home can save you a lot in utility costs. Start with adjusting your thermostat. If it’s winter time, turn it down a few degrees; and turn it low when no one is home occupying it (no lower than 50 degrees so the pipes don’t freeze). Replace your incandescent light bulbs with energy efficient ones. Unplug small appliances when they’re not in use as they still pull power from the outlet even when they’re not on. Likewise, turn off the television, the computer, the power strip, etc. Turn your water heater down a few degrees. Ensure there are no drafts in your house, and if there are, install weather stripping or window insulation kits to prevent cold air from getting in. Overall, just be more aware of the power supply you use, and be more wise. (For more tips, check out our article here on how to stay warm this winter)
8. Shop Wisely
When it comes to grocery shopping, some people can really overdo it. Keep things simple and start with a meal plan. Those who meal plan are less likely to overbuy. Shop the sales, use coupons, and purchase generic brands. Shop the perimeter of the grocery section as the middle usually has unnecessary foods and junk. Many supermarkets also offer curbside pickup, so you don’t even have to go in and impulse buy! Save time, and money, when you use this option!
9. Find Better Transportation
While some people can’t live without a car, there are some added benefits to being car-less. According to the American Automobile Association, the annual cost to operating an average sedan in 2016 was $8,558— which equates to about $713 a month! (This includes gas, car insurance, and maintenance). If you still need your car, try limiting your usage, downgrading to a more fuel-efficient car, riding public transportation, or even riding a bike!
10. Hold off on Pets
If you don’t currently have a pet, but want one, just wait a while longer. From costs of adopting a pet, to pet food, grooming, licensing, and veterinarian care, you could be spending up to $1,000 a year for little Lassie, and that doesn’t even include professional training, boarding schools, and home maintenance from “accidents.”
Saving up for your dream home doesn’t have to be a grueling process. These simple strategies will help anyone put more dough in their pockets. If you already own a home, you may be able to save even more by refinancing and bringing your monthly mortgage payment down. Talk to one of our representatives at Northern Title to see how.