By One Love
Could you move back home for a while? Less rent. Do you eat out a lot? Don't. It's expensive and fattening. Do you drink alcohol at the bars? Don't it's expensive and also not good for you.
Can you live without a car for transportation. Just think, public transit, walk, bike, and it's good for you. No insurance to buy & no gas to buy. Some ways to save.
I think that the hardest part for people is that they are paying high rent costs and can never catch up to save for 25% down payment.
Doing the math, you have about $210 unaccounted for ( which can go pretty quickly with extra trips to the grocery store, gasoline and on and on...) Rounding it off to $200, if you want to save around 75% of that, you're shooting to save $150 a month,
Just take $37.50 every paycheck and stick it in the bank as though you had another bill to pay--or "pretend" your rent is $900 and throw it in there.
On those couple of times a year there are five weeks in a month, toss as much of that paycheck into the savings account as possible.
You are missing more money than you think as your math is incorrect. $380/week is actually $1,646/month. Many people make this same mistake. Your did $380 x 4 weeks = monthly income. That would be correct if there was only 48 weeks a year. However, to get the correct average take home monthly pay - it's $380 x 52 then divide by 12 months. I get $1,646/per month average take home not $1,520.
Do you have energy efficient light bulbs? Worth the investment, they can move with you later. Unplug energy sucking clocks, tvs, toasters. The convenience of these items is far outweighed by the cost for their electricity. If you are home 4 hours an evening, that is all the tv should be plugged in. Use your cell phone as an alarm clock and get rid of your other one. Are you taking "army" showers? Turning off the water while lathering can be a cool experience, but less water means more money. And the obvious, if you already know you have $200 unaccounted for monthly, put the amount in the bank at the first of the month. You will soon find out where it was going and can take measures to shore up the leaks. Pay yourself first.
Creating a budget...
What I would do, for 1 month write down everything you buy/spend. Bills, eating out, carrying money etc and see where you can and are willing to cut back on and save the difference. fixer uppers have pros and cons. Are you a fixer upper type of person?
Are you looking for a first time home or a place/neighborhood you want to live forever at? If you know exactly what neighborhood you want to live in, go to any open houses in that area and ask the realor lots of questions.
What the average utilities are, city/county taxes, etc.
Then once you have the facts and prices there are first time buyer loans.
Then you might want to look into foreclosure homes. I have my taxes included in my mortgage payment so I dont have to worry about coming up short when its due.
To my 2 cents:
I don't plan on buying a house with this income. These are plans to start saving. The statement's deeper meaning is, I can budget my small income and manage to pay rent for $750.
I wouldn't dare jump in the ocean with a canoe. I think you read too fast. I'm thinking of a plan to start saving and budgeting to prepare me for exactly what you are talking about.
Like I said before, there has to be a starting point, this is a goal, and I will be a sucessful homeowner.
I really appreciate the feedback.
Do you have any suggestions other than the one's that has been previously discussed.
Cowanda wrote: "Surely if I can afford $750.00 rent, I can pay for a house."
Surely is not correct. Here's advice I've given to others who asked in real life. Have you thought about taxes and interest and insurance ADDED ON TO the principal amount of a loan. Then there's larger utility bills to maintain a larger than an apartment space.
Thinking about fixing up a 'fixer uppper' house? There's $ associated with that too. Some say your entire house payment should only be 25% of your take home pay - at $1520/month you'd only be able to afford a house payment of $380/month.
What is your down payment GOAL? Again this should be (and probably is with today's credit market) 25% of the sale price of the house. $100,000 = $25,000
Owning a home is not as simple as "Surely if I can afford $750.00 rent, I can pay for a house." I'm sure there's lots and lots of people out there who can attest to error in that statement.
Please rethink your plans and talk to other successful homeowners about the day to day expenses and work involved in owning a home.
I don't mean to talk you out of buying a house. Just make you think and plan and work towards your successful purchase! Good Learning! Good Saving! Good Luck!
I was listening to country music this morning and I heard the following advertisement. Call 1-800-990-2303 for a foreclosure list.
Thanks for all the tips, but keep in mind that my income is only a minor set back.
After graduating I'm sure I will have a decent income. At least better than it is now. THere is a starting point some where in life for this and I have decided that now is the time to at least start thinking and planning for this personal goal. These all are very good tips and I really appreciate it. I am calling the utility company today and going to go ahead a lower the car insurance. Just those couple of dollars alone can be saved over a year it will add up.
After you pay your bills, you have just $210/mo left, so it would be hard to save +200/mo. Start by tracking all the money that goes out so you can see any leaks. Work at lowering your utilities. With consistency, you should be able to save a decent deposit in time, but remember, home ownership is more expensive than renting. You'll need money up front to pay for the closing, insurance on the house, utility deposits, property taxes, and minor repairs.
Down the road, you'll need the contingency fund for emergencies (which always happen at the most inopportune times) and repairs to both your house and vehicle. You'll also need to buy things for the house (curtains, paint, etc), and will need to figure a budget for entertainment, gifts, etc (I'm only mentioning this, because your budget will be tight).
Be practical and look for a home in you budget, if you buy too big and utilities, food, insurance, and stuff goes up, you'll have a difficult time paying them. Good luck--hope all works out well for you.
Please visit daveramsey.com
I'm taking the "Financial Peace University" course for FREE at our chapel. There is a Baptist church that was giving this course for free too. So check around to see if there's any church in your area that is offering this course for free.
This is his "Seven Tips For Financial Peace" :
-$1,000 in an emergency fund
-Pay off all debt with the debt snowball
-3-6 months of expenses in savings
-Invest 15% of income for retirement
-College funding (if you have any children)
-Pay off your home early
-Built wealth & give!
& for most "THE BEST TIP? Pay cash!"
Cowanda, I know you might not be able to do all of them but at least try the first three. In the website you can enter your zip code & it will tell you where the class if being offered maybe you can email or call them & explain them your situation if you can't afford it & you might get it for free. Please let us know how things turn out. As soon as I finish sending this feedback I'm saying a prayer for you. GOD bless you & fight the good fight. We're all here to listen & help if we can.
Log onto any search engine and type in foreclosure homes or government foreclosure homes.
If you are getting $4,000. tax refund, then you should claim more dependents and get the money to use monthly ($300.00). The government is using your money all year, and not paying interest on it. If you have more money monthly you could pay off all debts and not be paying interest on the debts.
Could you raise the deductable on your car insurance so you would have lower payments. If you could pay that quarterly or semiyearly, the payments would be less for car insurance.
Don't forget to add the other bills you will have with home ownership like insurance, taxes and upkeep.
I hope you are able to realize the dream of home ownership.
For budgeting help go to daveramsey.com. Very simplistic and usable approach. it really helped us.
Blessings to you!
What can you do to drastically reduce your utility bill. Your local power company may be willing to come out at no charge to inspect your connections and heating/cooling and tell you how you might reduce some expense. Try it.
Please don't fall for those rent to own scams.
Scams are happening all over the country.
I really love this house and I want to approach this landlord about the rent to own deal.
But if that doesn't go well I will be looking next month for a house with the rent to own option. But please tell me if I'm wrong, if you are from Savannah, $650.00-$750.00 is the going rate for a house in a decent neighborhood, good school district, and good police coverage. I know that is another subject, but those are some things I look for when renting and especially buying a house.
Thanks for the other suggestions, I am really going to take heed to them.
Money seems kind of tight for you, like a lot of people. Could you get a cheaper place to rent or get a part time job to save $$$. Or look for a deal for a house that is rent to own where the sellers put part of your rent aside toward the down payment. Good luck to you.
My advice is to set up a savings account and have automatic withdrawals taken from your checking account every month (or week, whatever works for you). You won't miss it because it's almost like you never had it. There is no harm in saving as much as possible because it will be there if you ever need it in a real emergency.
If you really want to know where that $200 is going every month, keep a detailed diary of everything you spend - from a stick of gum to a soda from the vending machine to groceries. It's a real eye opener.
Want to juice up your savings even more? Dump all your change into a jar every day, with the goal being to put away at least a dollar a day. That doesn't sound like much bit if you add that to monthly savings you'll pay off your debts and be on your way to owning a home in no time!
Also, your utility costs seem very high. Are there areas where you could improve? Would your landlord be willing to do weatherization? I live in an old drafty house that's 1400 s.f. and my utilities are nearly half the cost of yours.
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