Posts Tagged ‘saving for seattle home’

Where to find Money for the Down Payment for your Seattle Home.

27th January

2009

written by robgraham

It’s no surprise to anyone that we are in difficult financial times for Seattleites. So if you are hoping to buy a home here in the Puget Sound area in the near future and also hoping to pull back on spending a little, what are some ways you can save a little extra each month for that down payment?

Getting Started:

Set up a Savings account that you promise not to touch. This account is exclusively to be used for money to go toward a down payment, closing cost and purchases to be made (read furniture, etc.) for your new home. Do it in an entirely different bank from your other accounts. Setting up a savings account does two things. First of all as it grows you will feel better about your financial situation. The account will also earn a small bit of interest that is free money toward your future home.

Once you set up your new savings account, where do you find the money to trickle into it?

For each area you cut back, take the money instead and put it in the savings account. You’ll get the hang of this soon and it actually becomes a bit of a game to find more places to save. Here are some suggestions.

Cut back on a Latte or two. Ok this one is tough for me too, but cutting back on just two lattes per week would generate about $9 extra dollars in that savings account per week. Each time you drive by your coffee shop of choice, go ahead and deposit the money instead into the savings account. Each month you will be depositing around $40 into savings. Not a bad start.
Loose change – This is an easy one. Each day when you come home have a jar set out wherever you leave your keys and wallet or purse. Put all of your loose change in a jar. Each month take the change roll it and deposit it in the savings account. Before long you will be surprised at how much it adds up to.
Take your lunch with you to work. You can easily save $5 per day by doing this if not more. Again take that $25 and put it in the savings account. That’s $100 per month all by itself.
Loose the land line. do you really need a land line for your phone? I gave mine up years ago and don’t miss it at all. In the era of cell phones, having an extra phone at home is somewhat wasteful. Ditch the land line and put that $30 per month toward your new home.
Loose HBO and Showtime. Ok I love them too, but now is the time to be making some sacrifices. Premium cable channels are fun, but how often do you really watch them. Cut them out of your bill and you will be amazed at how much you save. Again, put that money instead into the savings account and watch the balance grow.
Less dinning out. This is another hard one, but one meal for two can easily run between $50 and $100. One less meal a month at your favorite restaurant and you are one step close to that new home.
Give up that gym membership. I only recommend this one if you have a membership that you do not use and or have a healthy alternative. Riding your bike, walking, jogging outside are all free. Don’t ever give up working out! but if you can find healthy free alternatives and can save that monthly membership, give it up. I did and now save $60 per month.

Some more tips:

Track your expenses monthly. Go out and spend a little to get some financial tracking software. Grab your most recent statements and get to work. Actually sitting down to looking at your finances each month will do wonders to remind you where your money is going and where you can save for that new house.
Pay off your highest interest debt first. any financial analyst always gives this advice first. Make a list of your debts and make it a goal to pay off the highest interest debt first. It saves you the most money in the long run and provided the interest rate you are paying is higher then the rate you are getting on that savings account, it is always in your best interest to pay it off.
Tap other resources. With regard to down payments, programs such as FHA and VA loans have generous allowances for family members to gift you part if not all of down payments and closing costs. Ask for your birthday and holiday presents for the next few years in advance. See if grandma would like to help you out with either a gift or zero interest loan over the next few years. Often they love to help if they can.
Be alert to upcoming opportunities. The Obama administration will announce shortly, their plan to get the economy back on it’s feet. Included in that package will be a lot of items aimed at stimulating home purchasing. Some things discussed may include, tax breaks for home purchases, removal of penalties for accessing resources such as 401K’s to purchase a home, etc. no one is quite sure exactly what will be introduces and ultimately passed by congress, but there will no doubt be incentives for accessing greater resources to purchase.
Stay motivated. Place a photo of a beautiful dream home on the fridge, in your car or in your wallet or purse. Reminding yourself often why you are making these sacrifices will go a long way to keeping you motivated. Go on line and look at houses. Set up a free search to receive new home listings in the areas you are interested in on a daily basis. The more you do to keep your eyes on the prize, the more you are likely to stick to your efforts.

I’ll do my best to keep you posted right here to all the opportunities available to home buyers. Feel free to subscribe to the feed to get future updates.

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