Tag: life

Hi guys! If you are like the average 20 something year old, you are broke. It’s just a matter of fact. You don’t have stocks, you barely have a savings, and you are probably living paycheck to paycheck. If you are reading this, you are most likely where I was, thinking you could never ever buy a house with a 20% down payment. I am here to tell you, you don’t need anything close to that.

I was the same way, but I really didn’t have to be. I was working all the time at the restaurant (like six days a week usually), and making pretty good money. I wanted more. I was tired. Tired of paying rent every month for a small 950 sq ft, 2 bedroom apartment and getting nothing in return for it, other than a place to live. I decided I wanted to buy a house. I wasn’t married yet, and had no kids. I only had one problem: How the heck was I going to save up a 20% down payment for a decent home on the paycheck of a server?

Turns out, I didn’t need to.

Full disclosure: I live in North Carolina where the homes aren’t super, super outrageous. These tips may not work for you if you live in a huge city where the housing market is inflated.

After doing some research, I found out that there are actually several different kinds of loans a person can get when buying a home. The type of loan I was able to get for my house was something called an FHA loan. Unlike a traditional conventional loan, you don’t need to put 10-20% down to buy. Instead, all I needed was 4.5%. 4.5%?!? I was stunned. I had spent so much time not even considering that buying a home was a real option. This brings me to my first of a few tips on what I did to buy my first house, and maybe what you can do too.

Tip 1: Find a lender, and get pre-approved.

This first tip is super easy, even though it may seem a little daunting. You can Google lenders or ask some other homeowners you may know on who they used. You can use your bank for this process, or you can help your community and use a smaller, local loan officer.

The pre-approval process is so important, because they will be able to tell you how much house you can afford. As much as we all love looking at the 5+ bedroom new constructions on Zillow, this just isn’t realistic. In fact, most REALTORS may not even show you a home without a pre-approval letter.

Don’t get ahead of yourself though, because you may not even get pre-approved at all. That is okay though, because they will be able to tell you what parts of your financial life you need to work on. They can see which credit cards you need to pay down, and help you make a game plan to get you on the path to owning your first home.

Tip 2: Look at your spending habits.

If you are anything like I was in my early 20s, I was going out all the time. Brunch every weekend? Yes. Starbucks at least every other day? Yes. Letting Target tell me what I need? Yes.

I ended up downloading the free Mint App (not sponsored, just what I used) to track where my money was going. Guys. I was spending over $150 a month on Starbucks. What?! I don’t even want to talk about what my number was on food and drinks, but it was not pretty. Online shopping? Even worse. Turns out, I was wasting $500 a month on complete nonsense that I could have been putting into my savings account. Don’t be like me!

Tip 3: Make a budget, and stick to it!

I decided to make my monthly Starbucks budget $40 (i’m not a saint guys), so when my app let me know I hit my limit, that was it. No more fancy coffee. I made it work though, and bought these syrups off Amazon and made myself a little coffee bar at home. They come in all sorts of flavors and take forever to run out! Did I mention zero calorie and sugar free? I cut way back on my online shopping, and tried to go out to eat or get take out only once or twice a week.

That still wasn’t enough.

Tip 4: Find a side gig, or pick up more shifts at work.

I still needed to save more money, and at a faster rate. I picked up high volume shifts at work, and started dog walking for people. I used Care.com, but Rover another option. I also offered doggie check in’s, and let them out for potty breaks if their owners couldn’t come home during the workday. During the holiday weekends were even better, because everyone was going out of town. You could also babysit, clean out your closet and sell on Poshmark, drive for Uber, deliver food or groceries for Instacart or DoorDash. The list goes on and on.

Tip 5: Use a saving app.

I downloaded the Digit App. It was free when I used it, but I think it costs a dollar or so a month now. You link your bank account up, and decide if you want save vigorously or more laid back. It will automatically pull random amounts of money from your account, usually about the cost of a coffee or gas station snack.

Using these tips I was able to save just over $4,000 in 4 months, and I purchased my home a couple months after that.

I hope this helps you guys, or at least puts buying a home back on the horizon for you!