Start saving and planning for that down payment NOW!
For those of you who have millennial children, I’m pretty sure that you have (more than once) helped them advised them on budgeting and/or gone through all of their expenses andmade suggestions on what to eliminate or what seem to be unneeded. Then, after they have saved some money, they decide they want to buy a house or get a master’s degree and who do they go to for help? YOU. Here are some quick fixes for saving money and it’s pretty amazing how much can be saved in a year—even enough for a down payment? This is not just for millennials though, seniors on a fixed income can use these savings, too. Here are some ways to save.
Who doesn’t love a latte every day? We all do, but it’s time to skip the daily latte and make coffee at home. If you need fluffy milk, buy a fluffer ($1 at IKEA).
Annual savings: $1095
Cut the gym membership. Don’t stop exercising, but get creative with your routine. Walk on your lunch break, ride your bike on the weekends or both. The average monthly cost for a membership is about $50 a month.
Annual savings: $600
Cancel the cable and get a Roku. With all the digital outlets for news and entertainment, cancelling cable for a year is doable. According to the Leichtman Research Group, if you drop the cable in favor of, maybe a Netflix account at $7.99 per month (although Netflix is set to increase to $8.99 per month), you’ll save $91.11 per month.
Annual savings: $1,093.32
Unlimited everything plans on your phone. Did you get one of those unlimited everything plans when you bought your phone? If you don’t talk on the phone that much and you don’t use much data, you can switch to a lower priced plan—or at least drop a couple of gigs of data.
Annual savings: $120 to $300
Packing a lunch instead of buying could save a bunch. It’s not that hard, it just requires a little planning and discipline. Make more dinner than you need and take it for lunch the next day.
Annual savings: (at least) $1560
Cocktails anyone? At about $8 a pop for a cocktail in a bar or club, the price can really add up to about $48 per week. Don’t be a hermit, but cut down to half of the bar outings.
Annual savings: $1248
Dry cleaning can add up. There are dry cleaning products that you can use at home and/or shop carefully for items that do not need to be dry cleaned. Cut that amount in half and…
Annual savings: $1354
Now that your millennial offspring is on the road to saving $7070.32 a year, the next step is to build up credit—not just credit, but good credit. Often times, mortgage interest rates are based on credit rating and a little work at building up good credit can bring a ton of advantages and savings when it comes time to buy a home.
From BankRate, here are some simple ways to improve your credit.
- Watch credit card balances. One major factor in your credit score is how much revolving credit you have versus how much you’re actually using. The smaller that percentage is, the better it is for your credit rating. The optimum: 30% or lower. To boost your score, “pay down your balances, and keep those balances low,” says Pamela Banks, senior policy counsel for Consumers Union.
- Eliminate credit card balances. The solution to improve your credit score is to gather up all those credit cards on which you have small balances and pay them off. Then pick one or two cards that you can use for everything.
- Leave good debit on your report. Debt that you’ve handled well and paid as agreed upon is good for your credit. The longer your history of good debt is, the better it is for your score.
- Pay bills on time. Plain old on-time payments are one of the biggest ingredients in a good credit score. Sometimes one of the best ways to improve your credit score is to not do something that could sink it. Two of the biggies are missing payments and suddenly paying less (or charging more) than you normally do. Don’t! Steady as she goes is the best way to handle the credit card bills.
Some people don’t know this, but every time you apply for a credit card, it can cause a small dip in your credit score that can last up to a year. When you are trying to build up your credit, avoid applying for any credit cards. Remember, you don’t want to do anything that indicates risk. Monitoring your credit score from time to time is not only helpful, but can be very uplifting, too!
After a years of these good practices, you can congratulate yourself (or your offspring). Money has been saved, (over $7000 a year), bills are handled and the credit score is rising. It just may be that the first home is just around the corner and there is something pretty wonderful about owning a home. Discipline, thoughtfulness and some plain common sense—it’s just not that hard!
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