Life is expensive and saving is tough.
Staying on top of your student loan payments, car payments, utility bills, health insurance, groceries, cell phone bill, and maybe having a liiiiiittle fun along the way will cost you a pretty penny. I didn’t even mention the skyrocketing cost of rent. Payday is always exciting. It’s so much fun watching the money magically appear in your account on payday. But then after all your bills, bills, and more bills, do you even have enough to survive, let alone save for something intimidating like a down payment???
It’s tough for everyone, even an average month. It seems like clockwork once you start to get ahead:
• Your friend gets engaged and wants you to be in the wedding!! How exciting!!! (average cost of being in someone’s wedding is $1500)
• Your car runs perfectly fine until one day, it doesn’t. Totally unexpected $1200 mechanic bill. We’ve all been there.
• Your pet gets sick. Vet bills can be huge and out of the blue.
• The Seahawks have a big game coming up. Can’t miss that!! No really, you can’t miss it. That’ll set you back a good $600 if you include tickets, parking, food, etc.
Maybe all these things happen to you all in the same year. You don’t have much in the way of savings, you even have some debt.
Sure, buying a home would be great. Paying down the equity every month, watching the value increase over time, and taking advantage of the tax write-offs.
“But what’s the point of even trying?” you think to yourself.
It’s not your fault. But here’s my advice for you. Let’s get together and talk about one or more of these things.
1. You might not need a down payment. You can put zero down. There are two major loan programs that don’t require a down payment at all. What’s the catch you ask? Depending on the loan type, there might not be a catch. One loan I’m referring to you will mean a .25% higher interest rate. Totally not worth delaying your home purchase over that!!
2. Even if you do need a down payment, you don’t need 20% down. Or 10% down. You personally, or the home you’re buying might not qualify for a zero down program. The next best thing would be 3% or 3.5% down. You can usually get away with one of those small down payments easily. It’s actually really, really rare that someone puts down 20%. When they do, it’s probably because they sold a home and are now using the proceeds from the sale as their down payment.
3. I’ve personally saved for down payments three times now... The first time, I was 22, single, and every penny I had earned was from serving tables. I have some experience with saving money and would be happy to share with you.
What I am preaching here might not be applicable advice for you. But, do let me know if you have a coworker, friend, or family member who might benefit from this information. I can sit down with them too!