Saving for a home: Put your purchases in perspective
With the New Year approaching, there's a lot of talk about resolutions. Perhaps your New Year's Resolution is to buy a home in 2014, but how do you get there? You've been saving for what feels like forever, but the amount in that savings account is just not going to cut it. Fortunately, there are a lot of programs out there that can help you out. With an FHA loan for example, you can put down as little as 3.5% on your home. However, that's still a lot of money. Between the down payment, closing costs, and all of those little essentials you need when you move in, the amount of money you need can become daunting. So, you need a plan.
Start by making yourself a budget, and stick to it! Think about the big picture here. How important is it that you're able to buy a house? Can you give up going out to dinner three times a week for the next few months in order to save more? Can you forego buying those new shoes? Make yourself a budget that focuses on the essentials, but allows you a little bit of flexibility. You can't expect yourself to buy nothing and never eat at a restaurant for a whole year. You'll get frustrated and give up. That's why it's important to make a budget that's possible for you to stick with from the beginning. Some people have more self control than others, so think about what is possible for YOU to achieve. You'll still need to push yourself, or it'll take you years to save enough money. A temporary change in lifestyle can really pay off in the long run.
No, I'm not saying that you need to become a recluse and survive solely on ramen noodles. It can be surprising how much all those little purchases can add up though. Yeah, maybe that lunch was only $10, but $10 a day, is $50 in a work week, which adds up to $2,600 a year. That's just on lunches (and $10 is a pretty inexpensive lunch if you live in the NOVA/DC area)! Start packing your lunch, it'll save you loads of cash.
When I was saving for a home, I'd often find myself wandering into a store, and I would inevitable find something that I just HAD TO HAVE. Only, I didn't really need it. It may sound crazy, but whenever this would happen, I would actually ask myself, "What do you want more: this outfit, or a new house?" I think you know the answer to that question. Was spending $100 on a new outfit really going to keep me from buying my house? No. But $100 on an outfit today, $50 on new shoes next week, another new outfit later, and pretty soon you've blown hundreds, if not THOUSANDS, on stuff you don't really need, and you are no closer to buying that house. Even though I'm no longer saving for a new house, I still ask myself that same question whenever I'm saving for something, whether it's a great vacation, new furniture, or whatever I set my sights on! Just remember: you can do anything if you put your mind to it!
Start by making yourself a budget, and stick to it! Think about the big picture here. How important is it that you're able to buy a house? Can you give up going out to dinner three times a week for the next few months in order to save more? Can you forego buying those new shoes? Make yourself a budget that focuses on the essentials, but allows you a little bit of flexibility. You can't expect yourself to buy nothing and never eat at a restaurant for a whole year. You'll get frustrated and give up. That's why it's important to make a budget that's possible for you to stick with from the beginning. Some people have more self control than others, so think about what is possible for YOU to achieve. You'll still need to push yourself, or it'll take you years to save enough money. A temporary change in lifestyle can really pay off in the long run.
No, I'm not saying that you need to become a recluse and survive solely on ramen noodles. It can be surprising how much all those little purchases can add up though. Yeah, maybe that lunch was only $10, but $10 a day, is $50 in a work week, which adds up to $2,600 a year. That's just on lunches (and $10 is a pretty inexpensive lunch if you live in the NOVA/DC area)! Start packing your lunch, it'll save you loads of cash.
When I was saving for a home, I'd often find myself wandering into a store, and I would inevitable find something that I just HAD TO HAVE. Only, I didn't really need it. It may sound crazy, but whenever this would happen, I would actually ask myself, "What do you want more: this outfit, or a new house?" I think you know the answer to that question. Was spending $100 on a new outfit really going to keep me from buying my house? No. But $100 on an outfit today, $50 on new shoes next week, another new outfit later, and pretty soon you've blown hundreds, if not THOUSANDS, on stuff you don't really need, and you are no closer to buying that house. Even though I'm no longer saving for a new house, I still ask myself that same question whenever I'm saving for something, whether it's a great vacation, new furniture, or whatever I set my sights on! Just remember: you can do anything if you put your mind to it!
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