The two of you have made the decision to embark on a journey into buying a home . You may not be ready to make an offer yet, but there are some things you can do to make the process smoother.
You want to know where your credit rating stands and take steps now to fix any potential errors. You’ll also want to avoid anything that could negatively affect that rating. Don’t apply for any additional credit cards or make a large purchases. Of course, where many couples struggle is in acquiring the needed funds for a down payment. Saving 20% to put down can be a daunting task. There are programs for first time home buyers, but couples who want to buy a home may have to adjust priorities. Saving significant chunks of money will take sacrifices and some big decisions. Here are 11 major money saving ideas for couples.
1.      Monitor your spending. The first big step to saving money is knowing where your money is going. There are plenty of free apps to help you do this. Detail what you spend in each significant area of your life including housing costs, entertainment, travel, utilities, food and more. The more detailed your breakdown is, the better you’ll be able see exactly where the biggest savings can come from.
2.      If you are renting, find a cheaper place. If it is going to take a year or two to acquire the down payment you need, it can be worth making a temporary sacrifice in space or amenities to reach your long-term goal of home-ownership. A smaller space may also have the additional benefit of lower utilities, saving you even more. There are many reasons you ultimately will want to buy instead of rent, but in the short term, renting a cheaper place can help you reach your bigger goal.
3.      Limit dining out. The average American spends about $150 per month dining out. For Millennials, that number jumps to about $175 monthly. For a Millennial couple, that amounts to over $4,200 annually. Save dining out for truly special occasions and put the rest away. If you don’t know how to cook, learn. After all, your new home will likely have a nice kitchen you’ll want to know how to use.
4.      Find cheaper or free entertainment options. Schedule a movie night or discover your local parks. Go for a bike ride or spend a quite evening reading. Go on a picnic or visit friends or relatives. Rediscover an old hobby or learn a craft. There are free and inexpensive museums and other options to an expensive dining and entertainment choices.
5.      Take lunch to work. Make a sandwich or salad and take your lunch to work, rather than going out. To get immediate gratification, put $5 into your house down payment fund for everyday you do this. The more often you take lunch to work, the quicker your fund will grow.
6.      Use your cars less. You likely can’t completely eliminate driving, but when you realize how expensive it is to own and drive a car, you may want to limit its use. The American Automobile Association (AAA) says it costs, on average, $8,698 annually to own and drive a car in 2015. That’s a whopping $725 per month. As a couple if you have two cars, you can double that. At 58 cents per mile, you can see how you can quickly save by limiting your use of automobiles.
7.      Review your cell phone use. All right, we know we getting personal now. While overall, the average American cell phone bill is about $47, bills reached over $100 for 46 percent in the survey and about 13 percent say their bills exceed $200 monthly. If you are serious about saving money for a down payment, it is time to get serious about your cell phone use. Now may be the time to change carriers or reduce your service options.
8.      Review what you spend on cable TV. Like cell phone use, America’s cable bills have been growing. In 2015, the average households cable bill neared $100 monthly. That is a 39 percent increase over 2010. With premium channels and pay-per-view options, some family’s cable bills extend past $200 a month. There are now plenty of options to expensive cable bills including web based services, satellite services and cell phone choices. Look into the cost savings and pay yourself rather than your cable provider.
9.      Review all of your bills. Many of us have gone to paperless billing, electronic payments and even auto-pay on many of our bills. While this is a very convenient and ecological option, it can lead to bills that are constantly creeping up without us even realizing it. By taking the time to go through each of your bills thoroughly, you may catch surcharges or services you didn’t sign up for. It also may encourage you to find alternatives.
10.  Check your credit card rates. The average credit card debt per household in the U.S., in 2015 reached nearly $16,000. You may not have that much but odds are, between the two of you, there are multiple credit cards. But each card is not created equal. Put a sticker on the back of every card reminding you of the rate that card charges. Pay off the higher interest cards first and don’t use them. If you can, consolidate credit cards to a lower rate card. Contact your credit card company and ask if you are eligible for a lower rate. Paying off credit cards or at least getting rates lowered, can greatly improve your ability to amass a down payment while improving your credit.
11.  Get rid of the things you don’t need. If acquiring a home is a priority, its time to sell some of the items you seldom use anymore. Maybe you have a collection of items in a box somewhere or a series of small appliances that never see the light of day. It’s time to prepare for your move and downsize. Put the proceeds directly into your down payment fund.
When you are ready to buy, contact a Movoto agent. From saving tips to help you accumulate your down payment through closing, we are here every step of the way.
2 Point Highlight
Detail what you spend in each significant area of your life including housing costs, entertainment, travel, utilities, food.
You likely can’t completely eliminate driving, but when you realize how expensive it is to own and drive a car, you may want to limit its use.
