One of the challenges that people face, especially those that are first time home buyers is coming up with a down payment. Although there are several loans that require lenient down payments such as Michigan FHA loans – which only require a 3.5% down payment, it still can be difficult sometimes to set aside this money. Julie Krumholz, an experienced Macomb County lender shares some money saving tips below to help you quickly achieve your goals and get you on the path to home ownership.
Tip #1 – Pay Yourself First
It is a common misconception that if people only had a higher income that their financial situation would improve. The truth is, it is not what you make – it is what you keep. No matter how much you make, if you spend too much, you will not be in a position to save money.
When it comes to managing your finances, the most important thing is to pay yourself first. If you have not already, open up a savings account and consistently add money to it. Even if you are not able to set aside a lot of money each week, the key is consistency and creating the habit. Before you know it, you will be on the road to financial success and home ownership.
Tip #2 – Set a Budget and Stick to It
Sit down and determine your income and expenses. In addition to everyday expenses, include unexpected expenses such as car repairs. Also be sure to include the expense of paying down your debt. If you find that your expenses exceed your income you will need to either find a way to cut expenses or determine if there is a way to generate additional income.
Keep track of everything you spend. Keep a journal of your purchases and review the totals on a regular basis. Keeping a close eye on your spending can help you determine if there are any “money leaks” and how to eliminate them.
Tip #3 Prioritize Spending
When setting a budget, it is important to prioritize expenses and stay disciplined. This will require you to determine needs versus wants. The everyday latte from your favorite coffee shop, trips to the nail salon, spa, and dining out regularly may seem like needs, but if your goal is to save money, you may need to re-evaluate your budget as these items are more of a want than a need. Even though that $5 cup of coffee does not seem like much, it does add up over time and can hold you back from your saving goals.
Tip #4 – Avoid the Status Trap
A common mistake that people make is buying materialistic things that they cannot afford in order to “Keep up with the Joneses”. What you may not know is that the Joneses may not be financially fit either. Instead of buying things you cannot afford in order to impress others, pay yourself first and enjoy the satisfaction of reaching your financial goals!
Tip #5 – Use Credit Cards with Caution
Credit cards can come in handy for emergencies but they should only be used for items that you can afford to pay off right away. Using credit cards irresponsibly is an easy way to get into debt – quick.
If you cannot pay off your balance right away, you are wasting money on interest which could otherwise be invested in yourself and getting you closer to that down payment.
Contact Macomb County Lender, Julie Krumholz for More Information
Keeping these healthy financial habits will not only expedite your savings for a down payment, but they can help you stay financially fit as a new home owner.
Ready to learn more money saving principles? Join me for Show Me the Money Day, February 24th, 2018. Details below:
