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Some of my friends who have problems saving just don't really sit down and take a hard look at what they are spending on. Sure if you are making minimum wages it'll be difficult to save, but not impossible. You live below your means, which I do. Go back the last six months, get all finances laid out on a piece of paper, and figure out how much you bring home vs. how much you spend. Break down the expenditures, and prioritize the necessities down to the wants. Set a plan to eliminate or reduce your spending on the wants, and streamline your needs. Every little bit adds up, and before you know it you have your downpayment that you need!
My first house was a $200k home, the downpayment I saved from several years of low paying job when I first got out of college. Once people start saving responsibly instead of whining about everything being expensive (while still driving all around town in their SUV sipping their latte), maybe they can afford the house of their dreams and actually keep it in the long-run.
Go back the last six months, get all finances laid out on a piece of paper, and figure out how much you bring home vs. how much you spend. Break down the expenditures, and prioritize the necessities down to the wants.
Even going back 6 months shows a clear indication of the how the necessities have jumped through the roof. Rates added to the total of the utilities, food increases... if the price hadn't been raised, the size of the package (quantity within) has been reduced. You used to get a 14 oz. bag of chips for 99 cents, now look at the size for $1. Even the food staples like pasta, rice. We're (NYS) about 20 cents above the National average in gas prices. Within the past 6 months, we've been hit the hardest.
Most who can hardly save to buy clothing for their children, how are they to save for a house at the risk of losing it if times get even harder?
Work 2 jobs.
Get a better job.
Look into down payment assistance, in my county you can get up to 20% of the purchase price in a grant which is a second mortagge which has no payments and does not have to be paid back till you sell the house or 30 years.
Cutting back on Food, is the last thing anyone should do.
I will never cut back on buying grocery until my house/car/TV/Vacation/cell phone/internet etc. are all gone.
Afterall the only thing you NEED is Food,Water and Shelter, why would i cut back on those in exchange for my WANT.
Even going back 6 months shows a clear indication of the how the necessities have jumped through the roof. Rates added to the total of the utilities, food increases... if the price hadn't been raised, the size of the package (quantity within) has been reduced. You used to get a 14 oz. bag of chips for 99 cents, now look at the size for $1. Even the food staples like pasta, rice. We're (NYS) about 20 cents above the National average in gas prices. Within the past 6 months, we've been hit the hardest.
Most who can hardly save to buy clothing for their children, how are they to save for a house at the risk of losing it if times get even harder?
Everyone's situation is different. When I started working during school, I made $15K a year, and I managed to save 5K a year. After 4 years of that I made $40K a year, and saved 25K a year. So yes, it takes some effort. Chips to me are non-necessities, by the way. I drive a car that gets 40 miles a gallon. I shopped at thrift shops for clothing, and wore the same cloths for years. Even now I constantly look for ways to save. I didn't complain about it, but in the long run I'm better off. I can only give you my perspective of how I did it, I hope it works out for you in the future as well.
Work 2 jobs.
Get a better job.
Look into down payment assistance, in my county you can get up to 20% of the purchase price in a grant which is a second mortagge which has no payments and does not have to be paid back till you sell the house or 30 years.
There are many advantages to renting vs. buying. Renting is stable, whether it be month to month or a lease. When owning a house, ajdusting to ways of saving (I am by the way all for that, where you can) payments are made and it's all great.... until the furnace breaks down in the dead of winter. Which do you take care of first? The mortgage payment or the furnace? Which do you put on credit? the payment or the furnace?
At the least, renters have more assistance available to them to remain where they're living more than those who own property and can't make a payment, because a family member is hospitalized, a loss of job... (fill in another hard luck situation). With renting, I'm finding it's a little more easier in trying to save for college so your kids can have a better chance at getting a better job.
Of course a real estate agent is going to suggest people work a second job, I know a few and they are hurting for business. Buying a home, I'm under the impression is somewhat stagnant, so agents are at a loss of income.
Of the people I know of, read about, see within my City... they'll opt to take on a second job to support their families first. Owning a home is probably last on their list of "wants" .... because the "need" of shelter (at less price) is more of a priority.
What happens if a homeowner misses a payment? What happens when they lose their house because of unplanned hard times? The real estate agents still got paid, right?
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Chips to me are non-necessities, by the way.
Chips was an example... swap that item out for a box of pasta, a bag of potatoes, a package of hamburger.
LeafsFan85, what's a vacation? We (me personally) can afford to take a non-extravagent vacation once about every 5 years. Some people I know, have never taken a vacation.... and probably never will. It isn't that they don't know how to save, it's because after all the bills and "needs" there's nothing left over to save.
Something to think about for the future. If you work for a paycheck and have witholding taken out AND you think you MIGHT be able to afford house PAYMENTS, you might be able to adjust your exemptions (i.e., increase your take home) in order to save for a down payment.
In order to do this you would need to know the general price of the home, the amount of the downpayment, etc.
It's best to speak with a -->CPA<-- about this, not just an accountant, but a CPA.
Many, many years ago my husband and I couldn't understand how people we knew were able to afford a house while we weren't. We talked with a CPA and he figured this out for us (with the general price of the house and the down payment). He instructed us to increase our exemptions to 9 or 10 (there are only two of us in the household). We used the savings in witholding, plus a SMALL loan from a family member to make a down payment. The small loan was repaid by a tax refund from tax credits because of items that came with the house.
We were fortunate because there were tax credits available for energy efficient "stuff" and the house was new and came with a lot of these things, so we were able to take the tax credit.
BTW, even though it was costly for us at the time (we were young and broke, though we both worked) we ended up going to TWO CPA's to double check what we were being told as it seemed unbelieveable to us. The amount has to be figured out rather closely and the timing has to be correct, though I guess (but am not sure of this) if we hadn't closed by the end of the year in which we were taking the extra exemptions, we could have probably just taken the extra money from the exemptions and made an estimated payment to the IRS before the end of that year.
BTW, if you do decide to do this in the future (i.e., checking with a CPA), even if you think you CAN'T afford a house, a CPA can tell you what the actual figures would be with the mortgage interest deduction, i.e., you MIGHT be able to afford a house and not realize it. That's the boat we were in for many, many years. Though you might be living in an area that is expensive.
A word of advice (just in case you are the optimistic type) it's best to rely on information as to whether you can afford a house or what to do about YOUR particular tax situation from people who DO NOT have a vested interest in giving you such advice (i.e., not mortgage companies, etc. ). It's best to rely only on TRULY independent people that YOU hire (such as a CPA). The information I'm talking about should take less than an hour, though you night have to pay the rate for 1 hour. You may have a friend or a friend of a friend who's a CPA who might work this up for you without charge.
Don't give up on looking for a house (if you TRULY think you want the responsibility), even if this particular advice doesn't work for you. Ifyou tell everyone you know that you'd like to find a house something unusual might come up. Here's an example...sometimes when a family member who owns a house dies, the family just wants to unload the house as fast as possible. I've known this to happen when the house was owned by a older widow and her adult child lived in a different state. In that case, the woman made arrangements for the sale and the folks buying it were given one year to even come up with their first payment. You never know what's out there. Where we live now one of our neighbors got their house when the prior owner got a job in another part of the state and wanted to UNLOAD the house quickly. Our next door neighbor NOW bought her house from the son and sister of a woman who died. They wanted to unload so they could liquidate that asset and divide the money...
By no means am I saying buying is for everyone, obviously it's not and I rented for a long time before I can get to the point where I'm comfortable with buying and maintaining a house. You bring up good points in that it's just not mortgage you are taking care of when you buy a house. I would never buy a house at the maximum of what I'm qualified for, that would be foolish. Hence save enough and be prepared with enough liquidity to these emergencies. If you can't save enough for this, buying is not for you and I would not recommend it. Along this line, why complain about not being able to purchase when renting is obviously the better option?
I've offered my view on how people should better manage their finances based on my frugal life experience. My advice is to sit down and figure out your bottom line, and then just chip away slowly from there. If you say that there's no way to improve, well, I suppose then there isn't going to be a way until you get a notion that there may be a way, even if it takes many years, to get better.
By no means am I saying buying is for everyone, obviously it's not and I rented for a long time before I can get to the point where I'm comfortable with buying and maintaining a house. You bring up good points in that it's just not mortgage you are taking care of when you buy a house. I would never buy a house at the maximum of what I'm qualified for, that would be foolish. Hence save enough and be prepared with enough liquidity to these emergencies. If you can't save enough for this, buying is not for you and I would not recommend it. Along this line, why complain about not being able to purchase when renting is obviously the better option?
I've offered my view on how people should better manage their finances based on my frugal life experience. My advice is to sit down and figure out your bottom line, and then just chip away slowly from there. If you say that there's no way to improve, well, I suppose then there isn't going to be a way until you get a notion that there may be a way, even if it takes many years, to get better.
All of this does make sense, at a broader base. At the time of my comments, I hadn't realize the thread was moved to the general forums (I have it subscribed), much of my commenting was related to the City of Buffalo area where the thread first began.
Hope this helps explain a little better the perspective I was providing.
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