Strategies for Saving

by Kate Kennedy 03/01/2020

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
Author

Kate Kennedy

 

Kate Kennedy is welcomed by the Heyler Realty team as a sales professional specializing in the Westside of Los Angeles. Kate has developed the professional acumen specifically designed to advocate on the behalf of her real estate clientele. Living in Santa Monica, Kate appreciates first hand how special it is to live by the sea, and is committed to helping her clients find their own perfect place in the sun.

Having been raised the daughter of a lobsterman, Kate learned early on what “hard work” truly means.  Coupling her inherited strong work ethic with her entrepreneurial spirit, Kate decided to break out on her own and leave the snowy Maine coast bound for the sunny shores of California. 

To say there was a bit of culture shock was an understatement, but Kate is the type of a person that likes to make big bold moves, and embracing this challenge was no different.  It didn’t take long before Kate had settled herself in Santa Monica, finding the small town feel familiar and comforting- even if the ocean was on the “wrong” side.

 Once she established her new home, Kate quickly went to work building her business, “Kate K My Way.” For well over a decade, Kate has been running her exclusive personal assistant business which was built entirely from client referrals. Kate’s desire to help people and make a difference on a personal level is what made her stand out among the masses.  Her no-nonsense East Coast practicality is what helped her to get the job done, and done correctly. Kate employs these same principles to her work as a Realtor.

Living in Santa Monica and proudly serving her community as a Board Member of the Ocean Park Association, Kate appreciates first hand how special it is to live by the sea, and  is committed to helping her clients find their own perfect place in the sun. Her commitment to her clients is unwavering.   Kate’s communication skills, attention to detail and ability to focus on the big picture help to ensure easy transactions and positive results for her clients.  Above all Kate prides herself on her honesty, integrity and ability to bring good humor to all of her business dealings.

Outside the Office

Kate and her husband, Steve, live in the Ocean Park neighborhood of Santa Monica, and enjoy taking full advantage of all that west coast seaside living has to offer. As cheesy as it may sound, Kate really DOES love long walks on the beach, but you will have to get up very early in the morning to catch her down by Tower 26. Kate’s other interests include cooking for friends, attending local theatre, gardening, and reading science fiction and Stephen King novels.

Professional Accomplishments

Five Star Professional Rising Star Award 2019