Eighteen Months To A Down Payment
It is amazing how much the typical consumer spends on convenience items that they can substitute with a little effort. If you set a goal of buying your first home, there is a good chance you can get there in the next eighteen months by making some changes like avoiding the financial traps exemplified by the six following spending habits.
What Sort Of Down Payment?
If you finance with an FHA loan, you will need 3.5 percent of the sale price for the deposit and 1.5 percent for closing costs (usually included in the loan, but let’s be conservative here). So, 5 percent of a starter home that might be $100,000 to $300,000, depending where you live.
That means you need five to fifteen thousand dollars, which sounds daunting, right? But here is the thing: You might easily spend that much in eighteen months on things that you can cut from your spending. Even a single person might find $5,000 of savings in eighteen months (that’s just over $64 per week).
A married couple can easily economize to come up with an extra $64, $128 or even $192 per week by cutting down on all of the non-necessities the modern world want so badly to sell you.
Cut Out These Habits
Eating out daily – Make it a special treat for once a week and find recipes for easy-to-make home-cooked meals that you enjoy. Meal preparation is time-consuming, but if you cook for several days at once and refrigerate portions in single serving containers. You can multiply the benefit and maximize the savings by taking them to work or for hassle-free dining when you get home.
Growing credit card balances – Stop spending money on your credit cards, just stop, do it now! Lenders look at debt-to-income when considering loan applications, and they frown upon higher debt, so turn it around now and start reducing your balance.
Going to casinos – Gambling is taking money straight out of your pocket, the house always wins, and you will never own the house until you stop giving your money to casinos!
Premium cable packages – While it might hurt to forego the live game feeds and shows about dragons, ask yourself if that massive cable bill is worth not having homeownership in your future?
That gym membership you never use – Gyms sell hope more than anything else. If you have a monthly membership that you never use, save the money and get out and take part in some other free physical activity.
Those ten-dollars-a-month Internet services – How many accounts for audio books and streaming content do you have? Take a steely-eyed look at what nickel-and-dime services are soaking up your income and which ones are genuinely delivering value to your household.
Save Now And Enjoy The Rest Of Your Life
If you don’t already have the necessary means, then you are going to have to do a little work. Put these six habits to rest and you will be about eighteen months closer to making a life-changing purchase. It will be effort well spent that you appreciate most when you finally turn the key in the lock of your first home.