Saving For Your Down Payment Using Check Cards & Texting

So your thinking about buying a house

A lot of mistakes I seen recently is new home owners applying for loans with the preconception of not worrying about reserves or a down payment towards their new house.

Even if you did qualify for a 100% LTV loan that doesn't require any reserves and the seller is willing to pay all closing costs and prepaids, you still have to be smart in saving some money for new furniture, new bills and all of expenses that can occur when becoming a new home owner.

This is why its vital to play it smart and start a goal in saving extra money now.

Saving Money , Getting Organized : Made Simple

There are a lot of ways to help save some extra money here and there but I want to share a simple and effective way of doing so without effecting your daily rituals.

This plan is a combination of the Envelope System and the Debit Card System made simple.

Requirements

• Sticker and Black Marker
• Check Card or Debit Card (You will need 3)
  
• Phone with texting feature

Set Up

1.) Have your 2 cards in handy and write one 1 card "Budget" - [ Rent/Mortgage, Food, Gas, Phone, Bills ]

2.) Label the other card "Spending $$" - [ Going Out, Entertainment, Misc ]

3.) Label the final card "911" - [ To cover any un-forseen events and your savings, 911 should psychosomatic to not to spend ]

How It Works

The beautiful thing about debit/check cards is that the funds are directly taken from the account and once the funds is gone, its game over until your refill.

First write out a budget to see how much is needed for your must pay bills every month. Then find out a good number for your misc/entertainment amount.

View past bank statements and determine a SET LIMIT for your "Spending $$" expense. Don't try to put all your left over from your paycheck to "Spending $$" because you still have "911" to start depositing into.

• Every time you receive your paycheck, deposit your must pay expenses into "Budget".

• Then deposit a budgeted amount for "Spending $$".

• The left over into "911"

• Text your bank to get an update on your "Spending $$" funds, the biggest mistake is when people are out and can't check funds. Texting is fast and convenient so you will always know how much funds are available. Ever seen the Commercial where the wife asks the husband to buy a new tv and the guy starts drooling over the big tvs then texts in for his account balance and submits into buying a smaller tv :)

For Example

You get 2k a month from your job. Your must pay bills = $1,000 a month. You then decide that you normally spend around $500 in entertainment money a month. The left over is $500 into the 911 fund.

You don't touch "Budget" and "911" and just focus on swiping with the "Spending $$" card even for minor stuff like buying gum or magazines.

When its time for you to go out with your "Boys" or "Girls" simply check your "Spending $$" card by texting your bank and it will appear with your set limit for that month.

So its mid month and you know that you have $400 left on that card you party it up or if you find out that you have $75 left, you might wanna tell your friends to go do something cheap :)

I have been using this simple label system method and it works wonders!! I hope this helps save for your future homeownership!!

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Banks who currently have the text feature to check account balances: (Source MSN)

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As always thanks for checking out my blog, feel free to leave a comment and have a great day!

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