How To Save Money Fast
Looking for ways to save money fast? On this week’s episode we will discuss a few ways to save money faster and save for your first home. Check out the full episode and if you have questions about how to get started with Homeowner Prep, be sure to reach out to us or drop your question in the comments.
What You’ll Learn from this Episode:
- How much money do you need to save?
- Why saving 20% might be a bad idea
- You may already have the money you need for a down payment
- And much more!
00:00 Save Money Fast For Your First Home
00:36 Welcome To The Homeowner Prep Podcast
01:09 How Much Do You Need To Save?
01:29 You Don’t Need To Save 20% For A Down Payment
02:01 Why Are You Saving Money?
02:32 Life Happens, Setup Automatic Savings
03:39 Make Small Changes For Big Savings
04:05 Do You Know Where Your Money Is Going?
05:06 Saving Your “Bonus” Money
06:15 You May Already Have The Money You Need
07:49 Getting Started With Homeowner Prep
08:15 Connect With Us On Social Media
“Don’t look at extra money as a way to go out and splurge, and go on a shopping spree.”Eric Hellon
Full Episode Transcript:
A recent study by Citigroup showed that 6 out of 10 renters wanna buy a house, but the biggest obstacle holding them back is saving money for a down payment. So on today’s episode, we’re gonna provide you with a few key tips to help you save money fast.
Welcome to the Homeowner Prep Podcast, where every week we educate and encourage inspiring homeowners to help them buy their first home faster. If you aspire to own a home, you’re in the right place. So enjoy. Do us a favor and leave a review, a rating, and be sure to subscribe. Now, let’s get to this week’s episode.
Hello, and welcome to another episode of the Homeowner Prep podcast. I’m your host, Eric Hellon, and on today’s episode, we’re gonna be diving into a few tips to help you save money fast.
You know you have to save some money, in order to buy a home, for your down payment. And a recent study by Citigroup showed that 6 out of 10 renters wanna buy a house, but they just haven’t saved any money for a down payment. So we’re gonna go over a few tips that talk about how to save money fast, but most importantly, how much are you saving and why are you saving it?
When it comes to saving money for a down payment, you first have to know how much are you looking to save. Most first time home buyers will use a program like an FHA first time home buyer program where only 3.5% is required for a down payment. So I do wanna demystify the whole 20% down if you’re trying to save money and trying to save 20% instead of 3.5%, well you’re already swimming upstream. So you need to realize that the goal to buy your first home should be about 3.5% of your estimated purchase price.
To get an idea of what that estimated purchase price is, you should jump onto a website like a Zillow or a Redfin and just see what home prices are in your area. Find out what a typical home is going to sell for, and then multiply that by 3.5% to set a goal for your savings.
Once you know how much you need to save, then truly focus on why you’re saving it. It’s easier to save money when you have a dedicated passion to achieving a particular goal. So if 3.5% is your goal, and the reason why you’re saving is because you wanna get out of renting and you wanna buy your first place and maybe your family is growing and you need more space for them, this is why you wanna set your goal and really focus on your why, why you want to buy a house instead of renting that way you can lean on that when times get tough.
And that actually brings us to our next point times will get tough. Life happens, and so the easiest way to save money fast is to set it up automatically. If you get a payroll every two weeks or once a month, whatever it may be, set it up so that your employer automatically takes a portion of your income and sets it aside for you.
This really works for folks who work for the state or work in education where they’re forced to save a percentage of their income every single month. Maybe it’s in a pension plan or some type of forced retirement account. The fact of the matter is that if you don’t see it, you won’t spend it, and if you don’t have access to it, that’s even better.
So set it up to come out automatically, have it go directly into an account, and preferably have limited access to that account. What I mean by that is you wanna make it hard to go ahead and access that money. If you have that money going into an account and you don’t have ATM access to that account all the better. You don’t want it to be easy for you to go and draw that money that you automatically saved.
Another way to save money fast is to make incremental changes in your lifestyle. Do you find yourself spending quite a bit of money on eating out, Starbucks, maybe going to the movies, whatever the case may be.
I’m not saying take all the fun out of your life. You gotta enjoy life, but you should make some incremental changes and make some small sacrifices in order to achieve your bigger goal, which is homeownership.
The only way to make these incremental changes is to really analyze where your money is going. If you don’t know how much you’re spending eating out or going to the movies, it’s gonna be hard for you to measure some small incremental changes. So definitely take some time to really focus on where your money is going. Track it on a monthly basis, and then say, I’m gonna cut back just 2% or maybe 5%, whatever the case may be.
If you make small incremental changes and force yourself to save that money instead of spending it, then you’re gonna make the sacrifices needed in order to buy your first home. If you go out and you just try to rip off the bandaid, you don’t enjoy life, you don’t have any entertainment or no eating out, no social life, then chances are you’re gonna feel like buying a home just isn’t worth it.
You’re gonna feel like it is not worth all the sacrifices that you’re making, so make small changes, don’t take drastic actions that are gonna lead you to revert back to spending your money recklessly. Make some small changes in your spending and you’ll see that savings account add up.
Another way to save money fast is to decide early on how much of unexpected money or bonus money you’re gonna save in the future. So let’s say you get an annual bonus from work, or maybe you get a tax refund, if you say to yourself, I’m gonna save 50% of anything outside of my standard income, my standard paycheck, and I’m gonna put that aside in a savings account, then you’re gonna set yourself up for success.
Don’t let money come to you without a plan. If you have a plan for any unexpected money or what I call “bonus” money, whether it be a gift, an annual bonus, a tax refund, whatever the case may be, then it’ll help you grow your savings account so much faster. Trust me, you get unexpected money, the money you earn on your paycheck isn’t all the money that comes into your possession throughout the year.
So if you look at that extra money, as an opportunity to save money faster for your down payment, then you’ll be set up to succeed. Don’t look at extra money as a way to go out and splurge and go on a shopping spree. Really put that money aside and make the sacrifice needed in order to save for your down payment.
The last point I wanna make is maybe you already have the money that you need for your down payment. A lot of people may not realize that you can actually use your retirement accounts to help you buy your first home. Now, this isn’t available for everybody, but you should look into it if you have any employee sponsored retirement accounts, or an IRA, or a 401k, look into the availability of those funds in order to purchase your first home. They may have a one-time use that you can do that, without penalty, in order to buy your first home and then repay that money over time. Now the repayment may have an interest rate to it, so really look at the finer details and see if it makes sense.
You really have to understand the time value of money. If I can use a retirement account to purchase a home now instead of five years from now, what’s the difference in appreciation value that I’m saving myself? And as I gain that appreciation, will that help me pay back that loan to my retirement account that much faster?
So, look at all avenues of buying a home. If you’re a first time home buyer, you may actually take advantage of an FHA program that allows you to receive a gift from family members or friends or church members, whatever the case may be. So that might be an avenue to help you buy your first home faster.
So don’t feel like you have to save 20%. Don’t feel like you have to make all these drastic changes to your lifestyle in order to achieve your goal of homeownership. Take these tips and this advice to help you buy your first home faster, and most importantly, help you save money faster. If you need any help or any guidance in putting together a game plan and looking at all the different opportunities for your unique situation, definitely don’t hesitate to reach out to us, that’s what we’re here for. You can get started with Homeowner Prep by texting us the word START to 619-848-3700, or you can actually visit us on our website at www.homeownerprep.com/start there you’ll be able to set up an initial consultation with us totally free of charge.
If you just have a general question about your unique situation or scenario, feel free to reach out to us on any of the social media platforms. We’re on all channels and you can reach us @HomeownerPrep. We tend to get the majority of our questions on our Instagram account, so feel free to reach out.
I hope you got some great value from today’s episode on how to save money faster. We look forward to providing you with some more great content on the next episode, and until then, be blessed.
If you’ve enjoyed this show and got some great value from it, please be sure to rate and review and if you’re checking it out on YouTube, please be sure to subscribe. That really does help us to continue the show and bring in some great guests to help you on your home buying journey.
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