Buying your first home can be one of the most exciting
milestones one can reach in life. But unfortunately, many people who believe
that they are ready to be home owners find themselves faced with the challenges
of being able to afford it and not having enough cash saved up for the down
Mentally, we all know we shouldn’t spend more than we earn.
It’s one of the common sense “rules” that we try to live by, but maybe let slip
a little too often. These slip ups may have caused us to fall in a pit of debt
that we can’t seem to find a way out of. It’s time to move forward and take the
necessary steps to reduce your debt.
We’re going to first change how you manage your money,
making it easier to save money for a down payment on a home
Here are some tips and advice that can put you in the best
position to be a home owner.
Your Money Go?
Have you ever heard of the “Debt Snowball”? Create a list
of all the places your money goes every month; including rent, credit cards,
utilities, food, car payments, gas, insurance, charity, Starbucks, etc.
Then, split the list into two, separate lists.
The first list includes items that you’ll always have to pay
(e.g. utilities). The second list includes debts you can pay off like your
Sears credit card. That goes on the second list.
For the second list, reorganize the order of the items by
largest account balance (Debt Snowball).
The Snowball method will help you to rapidly reduce the
number of debts you owe.
First, make the minimum payment for every bill.
Then, make an extra payment for the one item that is on the
top of your list.
Repeat monthly until the item on the top of your list is paid in full.
After you’ve paid off the first item, take the money you
were using to pay if off and now apply it to the second item on the list. Knock
off each #1 item every month until all balances are paid off in full.
Image the encouragement you’ll receive once you start
knocking off those payments each month!
So, if you are already in debt, how can you expect to pay
anything extra to the bill at the top or your list? Just like a well-crafted
movie: clever editing. If you spend $100 a week on groceries, try to spend $5
To Cut Your Expenses:
Get Rid Of Unused Subscriptions! We all have good intentions to fully use that
gym membership but if you aren’t using the gym, there is no reason to keep
paying for it. Take up running or walking (free) or buy some used free weights
on Craigslist (cheap).
You get the idea. Whatever you can cut out of your weekly
spending, you can add to the payment to the top item on your Snowball or
An Emergency Fund
Set aside some money you save from cutting your expenses
and stash it into a special savings account that is created just for this
purpose. That way when tough times arrive, you’ll be ready. The emergency
fund can be used instead of pulling out your credit card.
Incremental Goals (And Reward Yourself For Reaching Them)
Give yourself incremental milestones ($500, $1000, $1500,
etc.) and reward yourself with something fun. If this reward costs money, then
set aside a little cash each month to save for this very purpose. There is no
sense adding to your debt due to your celebration of reducing it. Keep the
reward under $100.
Being prepared financially to purchase a home isn’t
something we hear about often but can be the best advice you’ve heard in a long
time. Buying your first home does not have to be a fairy tale, but a dream worth
dreaming. It just may take dedication and self-control to make it happen. Find an appraiser in your area:Alpharetta|Brookhaven|Buckhead|CobbCounty|Dekalb County|Dunwoody|Fulton County|Gwinnett County|Marietta|Sandy Springs