Downpayment saving tips?

Ksahlberg

I suck at saving! DH and I got approved for a really good mortgage to afford all the house we need in our desired are. Trouble is, we have NO savings and we make too much to get approved for a lot of those first time homebuyer programs

We'd like to buy within a year or less, but, realistically I don't think we can save enough for the downpayment and closing costs in that amount of time.

Advice?

GeorgiaRiah

Start the Dave Ramsey program ASAP.

delg23

Start looking at houses.  That is what we did and we miraculously saved 1k this pay period. 

Brina105

you need to actually do a budget and take a look at where you are blowing money.

My husband and I did this before our wedding to see where we could save.

Turns out we were spending over $400 a month eating out!! We decided that we would rather go out to one nice dinner a month and spend $100 and skip all the taverns and nachos at the local pub, and cook in. It's actually been nice to spend more time together in.

Sometimes we do "splurge" and get take out sandwiches or chinese but we usually split and order and bulk it up with what we have at home (making a salad to go on the side etc).

WE have cut our "eating out costs" to about $150 a month. That's $250 in savings alone.

 

rtaggart613

I definitely agree with the budget thing.  Eating out does tend to get expensive without even realizing it.  Also you can look into things you're currently paying for that you don't really need, like every movie and sports channel created with cable.  yeah, it's nice to have the choices, but making that small sacrifice for a year can save you hundreds each month!  And once you're into your house, you can always re-evaluate to see if you can afford to add some of those things back.

GFYULOSER

Create a budget, stick to it and make mint.com your new best friend.

Sisugal

BE CAREFUL HERE!  The bank is more than happy to lend you more than is sensible or affordable.  If you cannot save for a downpayment, you most likely are not ready for  homeownership --- it is MUCH, MUCH more than the mortgage payment.  In addition to downpayment and closing costs you also need inspection, moving costs, start up deposits, repairs/renovation, furniture/appliances/decorating, lawn care items.  AND still have an emergency savings in place  (stuff happens - water heater dies, roof leaks, etc).  I highly recommend keeping your housing costs (mortgage+PMI+insurance+taxes+utilities+HOA) to no more than 25-28% of your TAKEHOME pay.

Set up a budget NOW.  Pretend you are in that nice house you want to buy and budget for the amount you would pay for mortgage, taxes, insurance and utilities (which are much more than a rental) .  Subtract what you pay for rent and save the difference after you pay your current rent. See how that feels financially.  Do you have to make lifestyle changes to make it work?  Why you are finding out this information - you are also gaining savings.

Pay of consumer debt

Track your spending. EVERY dollar. Know where your money is going. Do this for several months.  Cut back on non-essential spending. Take on second PT jobs and save that income.

futuregabriel

We are kind of in the same boat. We want out of our apartment ASAP, not because we hate it but because we'd rather spend the money on a house instead. We are currently paying off all our credit cards and have no cable. We have internet and Netflix which brings us to about $38 a month and we cook A LOT. I know that I am a spender and he has really helped me put a lock on my spending since we joined our bank accounts. For me, personally, I like knowing that he can see how I'm spending and if it's something that really isn't necessary he'll catch it. He's never mean or rude but when I bought bottled water a work he asked why I didn't use my water bottle, would have saved me over $5 and I know it adds up. Good luck!

atlcatlover

PT jobs.  I worked a PT job for years to save money to buy my first place, and I've never regretted it.

Ksahlberg

Thanks guys!

I've made a budget, we calculated that buying would actually be cheaper than renting. I know I haven't factored in repairs etc. I have a PT job and all of it goes directly into savings. We cut all unnecessary expenses like netflix, etc. and negotiated our utility bills to be lower. I'm paying off credit card debt, which is perhaps why I can't save. I guess it just takes time...

 I guess I should stop ordering sushi and stop drinking wine to save a bit too

 

zelenu

Some things I have done to save in general:

 Canceled cable all together. We only have netflix for $8/month. We have been this way for over a year and neither of us misses TV. Saved $80/month.

We don't have a home phone, only cells. $50 savings monthly

I make my coffee at home each morning and put it in a travel mug-Keurig paid for itself after 2 months and I now spend .40 per cup of coffee vs. $2/cup.

I bring my lunch to work rather than buy it there. About $140/month savings.

At times, I have touched up my hair color at home rather than going to the salon. I don't always do it, but is saves $80 that I normally would spend about every 3 months.

I buy 90% of grocerys at the cheap grocery store (which has off brands and much less of a selection). I only go to teh major store for extras that i can't get at the cheap store. No idea if you have an option like this where you are.

I work out at home rather than paying for a gym membership.

When my paycheck comes in, I have budgeted a certain amount for savings that i transfer the same day I am paid. I am not allowed to touch that money.

Once I paid off my credit card in full, I made a rule to never use it unless I had a very specific need and a payment plan to pay it off quickly (I've had no credit card debt for 8 years now that has lasted for more than 2 months)

Neither my husband or I have ever owned a new car. We only buy used and it saves a ton of money.

I bought 50% of the house that the bank said I could afford-did this in case my husband or i was every laid off so that 1 of us could afford the mortgage in a worst case scenerio. I know you are saving to buy right now, but when you do, consider not spending the whole budget that you can technically afford.