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The Urban Specialists, Real Living Wareck D'OstilioPhone: (203) 668-7350
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Don’t Fall Prey to Budget Busters

by The Urban Specialists 06/27/2021

Image by Monster Ztudio from Shutterstock

It's time to find the perfect place of your own but becoming a property investor has one significant roadblock: a down payment. It’s something that can stop potential home buyers in their tracks.

While winning the lottery or inheriting a windfall would be fabulous, you don’t need those luxuries before you can buy a home. What you do need is a budget that gives you a strategy for saving while still attending to daily expenses. The challenge is that once you create the budget, you must protect it from the temptation to stray from it while you work toward homeownership.

Here are some proven savings tips AND the budget-busters to avoid along the way:

Strategies for Saving

Detached account. While it seems obvious, many people lack even one savings account. If you already have an account, open a separate one specifically for your down payment. Make sure that it is detached from your other accounts. Having a savings account designated specifically for your down payment may get you to think before dipping into it whenever other expenses arise.

Different bank. You can open an account at the same institution where you have a checking account but doing so makes it easy to move money back into your spending account. Open an account at a credit union or savings bank to which you'd have to make a special trip to remove funds.

Direct deposit. Have the down payment part of your paycheck deposited directly to your savings account. You'll avoid having immediate access to it. If you don't see it in your checking account, you are less likely to spend it.

Establish a Budget

Now that you have established a place to save funds, you need to create a budget to handle your remaining income. Many online programs will help you to create a budget and keep track of your spending. They are often free or low fee to use, and some give you access to a financial planner at a small cost. Here are some to get you started:

Mint.

Budget Simple.

Every Dollar.

YNAB.

Budget Busters

Many people resist living by a budget because it feels too restrictive. The notion that your budget monitors your spending keeps many from reaching even first-level financial goals. Money is a tool to help you get what you truly desire. If you wish to own a home, eliminate these budget-busters that will keep you from getting there:

Overpriced drinks. If your caffeine habit racks up more than $10 every day, consider cutting that expense in half. If you saved five dollars each day, you could add $1825 to your down payment account by year’s end.

Eating out. Just like a daily coffee break, restaurants and fast food meals can easily break a budget. Studies show the average American spends over $250 each month eating out. If that sounds like you, eat out half as often and bank another $125 each month. Over 12 months, that’s $1500 more towards your down payment.

Clothes. Many offices allow casual dress so spending on clothes for work might not be necessary. If you work in an environment that requires professional attire, purchase a few high-quality pieces that you can style in different ways with lower-cost items.

Expensive vacations. The travel bug bites in every season. Even a cheap flight with a hotel and rental car can result in a fairly large expense. Instead, you may opt for a getaway that is within driving distance while you’re working through your savings plan.

These budget-busters could add up to $6000 or more annually. That could be enough to qualify for a down payment when using an FHA loan. Add to that a portion of any extra money you receive throughout the months for bonuses, birthdays, holidays, rebates, and tax refunds, and your down payment account can grow significantly in just one year.

About the Author
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The Urban Specialists

CITY RESOURCES The great thing about urban centers is just how much stuff you find around you. Your favorite restaurants, cultural activities and museums are within walking distance of your front door. It's convenient and adds to how much you get out of your place. For more info on New Haven, check out these links: Info New Haven Visit New Haven We are passionate about the environment. We are eager to help you to add value to your current home, save money on utilities, make your lives more energy efficient and eco-friendly, and generally live a "greener" lifestyle, all without sacrifice. For more info on green living in New Haven, visit these sites: CT DEEP Neighborhood Housing Services of New Haven USGBC's Green Home Guide We care about historic properties and their communities and wish to encourage preservation of our community's architectural and cultural history. For more info on New Haven preservation, check out these links: CT Trust for Historic Preservation New Haven Preservation Trust Historic Homes Downtown Areas Neighborhoods Green Homes Bethany Branford Guilford Hamden New Haven North Haven Orange West Haven Woodbridge Olivia C. Martson Olivia Martson is a long time resident of New Haven. She lives and works in downtown New Haven and is thoroughly familiar with the pros and cons of urban living. From 1992-1997, she served on the New Haven Board of Alderman as the elected representative for Ward 2, the downtown neighborhood immediately west of Yale University. Fore more : Biography - http://media.mlspropertyfinder.com/418613/preview.jpg