Written by Carla Hill
Saving money for a downpayment is a very worthy goal. Homeownership has been shown to be a good long-term investment that creates family and community stability.
The National Association of Realtors’ 2010 Social Benefits of Homeownership and Stable Housing study found some delightful upsides of becoming a homeowner, such as it making “a significant positive impact on educational achievement,” and “evidence of the positive impact of homeownership on health even after controlling for factors like income and education.’
Many families find finances to be tight. Money comes and goes. How can you budget your life so that homeownership turns from a dream into reality?
First, be realistic about your current expenses. Take a few weeks to a month to track every expenditure. If you use a debit card for every purchase, you may already be able to go into last month’s records for a break-down. Divide expenses into columns: rent/mortgage, groceries, household expenses, travel, fuel, dining out, entertainment, clothing, etc.
Now, align that list with your monthly income. Are you sending out more than you’re taking in? Today’s economy is not a time to be cutting it close. If homeownership is truly a goal, then you should make sure that you are saving all you can.
Decide what things can be done without. Are you overspending on dining out or going to movies? Try to find alternatives that cost less or content yourself with home-cooked goodness and Netflix! A typical night out can cost anywhere from $50 to $100. If you save that money each week it adds up to $2,600 to $5,200 a year!
The same goes for cable or satellite TV. Many people pay tons each month for their beloved channels. At $100 a month, that adds up to $1,200 a year.
Start a savings account that is specifically for your downpayment. Put money in it at the beginning of each pay period. We tend to spend a dollar here or a dollar there when we have it accessible in our daily accounts. Be tough on yourself and transfer the funds to savings as soon as you have them. Then watch them grow!
Find other ways to save on money. Some families shop sales and with coupons. It’s time downgrade other parts of your life. Do you really need a luxury car and latest fashions or will a cheaper model and recycled fashions be sufficient?
Many companies offer family plans, such as gyms and cell phone providers. Credit card companies may be willing to negotiate a lower rate on your balances. Be willing to talk to companies to see what deals they offer!
The act of savings can be hard in our society. Everything we “want” is right at our fingertips, either down the block or on the Internet.
The key to reaching your goal is to keep your focus.
It will be worth it!