Add it up!

By: Ari Taylor

I want to buy a home! But how will I ever save up enough?

First off: What is your buying timeline? In one year? Two years?

How much will you need to make it happen?

--5% down on a house valued at $350,000 is $17,500. You will also need about $5,000 for closing costs and about $1,200 for home inspections (there may be multiple at $400/each). You will also want to keep a small reserve of about $25,000 for moving costs and furniture (AFTER you close).

There are a few ways to save which can help to get you toward your goal. First off, figure out what is and is not affordable for you. If your only savings is coming from your tax refund, then deposit that entire refund into a high-interest bearing account and do not touch it! It may take a little longer to reach your goal, but it will be well worth it. Start a separate savings account strictly for a new home.

Here are a few ways to make this dream happen:

Change comes from within!

--Do you save your pennies and other loose change? Now, I’m not saying that you’ll accrue an entire down-payment just from holding on to loose change alone, but you could potentially save about $600/year. In that one year, the cost of at least one home inspection is officially defrayed! One year of pinching pennies is worth about $600 and two years could potentially yield about $1,200.

BONUS TIP: Don’t use cash often? Add any bills under a $10 to your loose-change stash and forget about it. This could add an additional $200 to the stash!

Holiday gifts?

--Do Nana and Papa give you cash for your birthday and/or holidays? Sock it away, every little bit helps!

Taxes?

--Have your tax refund(s) deposited directly into your savings account rather than your checking account. The average federal return is $3,500. That gets you a bit further along!

Look at your expenses! Do you love the nightlife? How much is it costing you to go out regularly on Friday and Saturday nights?

Uber 2-ways = $40

Drinks = $60

Nightclub Entry = $20

Food = $20

That equals about $140 each night and about $280 for a weekend. Consider these numbers applied to 52 weekends in a year, which equals about $14,560 spent on going out. If you are a couple trying to save, those numbers sure add up! To be clear, I am not saying that everyone should give up going out on the weekends, but perhaps cut back on the pricey outings. If you went out one night per weekend instead of two, you could be saving about $7,280 every year. If you cut down to one night out every other weekend, that could save about $10,900 every year.

BONUS TIP: Don’t give up seeing your friends over money! Take turns hosting a group dinner or wine tasting. Everyone brings a $5 bottle of something and you always know where your phone and keys are!

Now, let’s talk coffee. Have you looked recently at what that latte costs you dollar-wise? Make sure you sign up for coffee programs when they are available. One or two drinks a month on the house really add up! Use your reward program card for regular coffees, which are cheaper. Then, that amazing $10 will be saved for a treat! When you get it for free, it not only helps your budget, but also have a fantastic effect on your diet! Say $7/day for coffee, that equals $2,555/year. Switching to a regular cup or even brewing at home will save you at least half of that!

Let’s Add it up:

Looking for additional ways to save? Joining sites like Ebates and Ibotta can help you save extra funds here and there, which add fantastically to your total savings. Cutting down on eating-out and utilizing meal-planning tactics can help get you a little further along with your savings as well. Formally organizing your budget can also add in a positive manner to your savings plan.

There are also down-payment assistance programs in many areas, as well as certain loans that require little-to-no money down. Ask your agent about these options!

Remember: This information is based on a home that is valued at $350,000. You may be looking to spend more or less.

Whatever your goal may be, call today and we can begin the process of making your real estate dream a reality!

**All information is based on average spending and tax amounts. Your personal numbers may differ***