You have been renting for awhile and are thinking about buying a home for the first time…..BUT you have little savings. Should you even think about buying a home? The answer is yes! Only if you start saving on a consistent basis.There are quick fixes, of course, like selling things you never use on the internet or on Craigslist, but freeing up cash for saving each month requires you to do so constantly– not just every once in awhile. It has to be a true commitment with your goal of saving enough for a down payment the prize!
The first thing that I would do is cut back on your expenses. Easy right? Take a good, hard look at your current spending. It’s the most difficult step (especially if you avoid your bank statement like the plague), but it makes the biggest impact in the long run. There are a few things to watch out for: Recurring bills and spending drains. Are you subscribing to magazines and newspapers? Instead read them online for free. Did you sign up for extra cable and movie channels? If your subscriptions don’t give you a product you’re jazzed up about (and you don’t use it frequently enough), you should cut the cord. Then there are daily purchases that might not seem like much individually. We’ve all told ourselves that a daily trip to Starbucks isn’t frivolous but we’re lying to ourselves. We could easily make our own cold brew at home, take it to work in a travel mug and save close to $60 a month. Just saying– that’s a gym membership! Also, rethink the way you shop….for clothes, groceries, online purchases, etc….Take the time to research comparable pricing and sales.
Begin to consolidate your debt. If you graduated college with more credit card debt than you’d like, you’re not alone. Buying on credit is tough to get right in the early years. Instead of spiraling into a panic every time your bills come each month, try consolidating your debt. There are tons of ways to do this these days, whether it’s transferring all your credit to one card or seeking out a third party loan at a lower interest rate. Getting all your debt on one bill makes you feel better, and lower rates will help you pay it all off faster. Eliminating your debt is one of the best ways to clear up cash for saving money– and truth be told, having to contribute such a substantial portion of your paycheck each month will prepare you for regular contributions to your savings account.
A few of my friends have taken on a second job to save more cash. One of them is an Uber driver and loves the extra income and flexibility. While having a second job can be exhausting over the long term, it’s a great relatively short-term solution that will help you stay afloat while you pay off debt. Best of all, it often boosts your income enough to drop a little into savings each month, too.
And one other piece of advice which I know is hard to do for many of us who live alone, is to cut back on eating out. It’s so easy to order take-out or pop into a restaurant for your breakfast or dinner but it does add up. Consider preparing meals when you have time in the evening for the next day or give yourself a little more time in the morning to prepare meals for the day.
You can do it!