With two kids who eat about 400$ of formula a month, two parents who eat 400$ of meat and veggies and month (even though we cook for ourselves, our food budget is absurdly high), and one mama who just can't say no to a J. Crew sale... How do you do it?!
Where do you save money? What did you stop buying? How much of a deposit did you have on how big of a house?
Travis and I are trying really hard to save money, but even when I tell myself "You don't need this 20$ skirt, you need a house!" I don't have an extra 20$ at the end of the month.
Ad I don't have a skirt.
So I would love advice from home owners and house buyers.
Because I am so freaking ready to choose my own Bathroom hardware already.
And have a yard.
A garden.
Oh, oh! And a kitchen that my Kitchen Aid AND knife block can sit on the counter of.
Sigh...
21 comments:
We're not home owners yet, but we are in the same boat as you guys (the wanting a home boat, not the having twins boat). It's tough to save money that you feel like isn't there! Seriously one of the BEST things we ever did was to take a money management class from Dave Ramsey. There are classes all around you can go to, or you can buy the "at home" study course (which is what we did) and it gets you SO pumped for saving and spending your money wisely. It was awesome. Another big thing we do is freezer cooking, and cooking with half the meat a recipe calls for and doubling the veggies. I usually get my grocery budget down to about 120-150 for the month that way. and you really don't even notice the meat being gone.
Good luck! Can't wait to read about what you guys have in store.
We aren't yet either...but that's out goal!
We did Dave Ramsey too....cash only/envelope system. It's just about being disciplined :)
Set up an automatic transfer of money to a savings acount every week, or two weeks or whatever depending on how you get paid. Do $50 a week and you'll have $2600 at the end of the year just from that.
We eat out of our pantry and freezer (I get really creative with our meals) and all the money we save from that goes to savings.
Make your grocery list based on what the store has on special that week and bring cash $ only. It's easier to add that impulse buy to your cart if you know you have the money in your checking account to cover the cost. If you have a set amount and know it'll put you over and you won't be able to pay for it you won't put it in your cart. Also when your boys stop drinking formula at a year, just roll that money straight into savings. You've been living without that $400 a month for how long? You can keep going! That's $4800! If you can do that plus $50 a week that is $7400 in one year.
We did that when we paid off DH's car. That $200 went into savings and so we had a down payment when his transmission went out and we had to buy another car.
Sorry for the novel length comment we are just really chintzy and save a ton so I know a lot about it!
I have twin boys and we got the okay from the pediatrician to switch them to whole milk at 10 months (my boys were eating healthy solids at that point). We didn't start the transition until 11 months. You would think that it would save a ton of money...but the sad reality is...it is expensive to feed two growing boys healthy foods! I would say that you will spend at least $100 to $150 a month on food for the kiddos!
I also do the cash system and it seems to help. I do it for groceries and fun stuff over the weekend!
I wish I had good advice. I also cannot resist the temptation of a good JCrew sale! Now that I'm a SAHM to twin girls and we don't have a second income, I'm looking for ways to cut back... but it's hard.
I have a hard time paying full price for anything... And I don't think I've ever bought something from J. Crew, but for us, I have a budget snapshot in my wallet for the month. Every time money goes out of our account, I write down the amount and update it every week. We go over what we have left in each budget at fhe. (There's a FHE doc on my blog...) Just knowing what we have available really influences our spending choices. And I totally second (or third or whatever we're on now) taking the Dave Ramsey class. He's a genius and extremely motivating. He also helps bring up topics for discussion with your spouse that you really should talk about but never would've thought about on your own.
Also, use your freezer, just like Dani said. :) When veggies are on sale, flash freeze and store them. When meat is on sale (Chicken gets down to 1.29/lb. in the summer) I buy a ton and can it or freeze it. It REALLY cuts down our grocery bill and I still have control over not using preservatives, etc. We also bought a bread machine that we use for EVERYTHING. so that's something to consider. :) Making your own bagels for breakfast is a lot less daunting when you can just dump the ingredients in and let it do its thing.
You can spend less than that on food. Matt and I average less than $100 every two weeks. And we eat really really well. You should make a list before you go to the store with a menu for 2 weeks and then only buy what you need for those. Also, when you get paid just put a certain amount into savings as soon as you get it. We've been saving $300 a month since August. We just pretend we make $300 less and don't ever touch it.
Do you all have an Aldi's? I switched from Walmart groceries to Aldi's and I spend for my husband and I and our twin 14 month old boys on average about $70 a week and that will feed all of us including the boys whole milk. I sure hope you have an Aldi's as it has been a real life saver and money saver!
We've tried a number of things. When we first got married, budgeting was HELLISH! It took us forever...but now it's a lot lot better! Currently, we use Excel's Personal Finance template that is just ready for you to plug numbers into. We set up some projected expenses and update it EVERY day, so we know where money is going.
Like many others have said, we also pull money out of paychecks as soon as they come in and put them in a different account that we don't touch.
I have two accounts (that we used to save). One that all of our funds go into, and one that transfers $200 - $500 per month into a high interest savings account. That high interest savings account is what we then put towards our (now) home. Make sense? Then you can't SEE the money so you can't SPEND the money.
it's hard. when we bought our place, we borrowed from our parents for the down payment. We were able to pay them back in 2 years with some fortunate investments paying off. Now we're planning on being able to sell for high enough that we can make a down payment....
but as far as saving money goes... meal planning and doing groceries every 2 weeks cut my grocery bill in half. Before doing this, I was doing one big ($400+) a month, and then picking up what we needed here and there, which added another $4-500 a month. By meal planning, and occasionally picking up milk as needed, we've managed to bring our total grocery bill to about $500 a month for the 3 of us. It's hard to get used to, but it does help!
Don't be discouraged... it will happen.
We just bought our house in Orem in November and the way that we saved up money was by making a budget. Starting last July I made a budget with all different categories(rent, utilities, car insurance, car payment, gas, groceries, eat out, entertainment, dates, tv and internet, etc), and just cut a little back in each category, so that more could go into the savings category. I think making a budget definitely helps because then you know where all of your money is actually going. I guess you can't cut money out of the babies food budget, but we eat really well and only spend 250-300 for the 2 of us on food, so I'm guessing you could cut back there some too.
And we bought a house for 163,900 and had a down payment of about 6,000. But our monthly payment isnt small. I mean, its not huge. But things you should know, with a down payment of less than 20% (which is so much!) you will have to pay mortgage insurance. Ours is about 135 extra a month on top of our mortgage, insurance, utilities, and all that. For a total around 1250 a month. Of course we didn't get a small house, its way bigger than you need. But just some things to think about.
When making our budget and thinking about buying we decided how much our monthly payment for a home could be, estimated how much utilities would go up and put those numbers into a home buyer estimater thingy to figure out what our price limit was.
Good luck. Let me know if you have questions. aimeeberrett@gmail.com
Do you have software for keeping track? We use Mint.com and just using it has made us save. Also check out the blog : And Then She Saved. She has some great ideas. Auto deposit into savings is key, think of it as a bill every month you HAVE to pay, not an option at the end of the month if there is any left over, there never is. I also love the book "Your Money Or Your Life". Best of luck! We are saving for a house too :)
I don't know if they're still doing this, but Key Bank was doing a house loan with like a $500 down payment and no mortgage insurance (which is really sweet because mortgage insurance tacks on like an additional $100 a month). Good luck!
I don't have any advice for you, I just wanted to say I am SO THERE WITH YOU!
So my husband and I are building a house right now, and my best advice is not to get a house just because it sounds nice, would be great, is your dream, etc. Wait. Houses are a luxury, and I think many (sometimes it seems like most) people in America do not realize that. My brother and his wife got a house because it sounded great. They didn't have much in the way of a down payment and didn't consider future financial situations (losing a job, more kids, etc.). They are now under water (owe more on the house than it's worth) because they didn't put much down when they got the home. That's a huge risk you take when doing a small down payment.
You could end up essentially renting your house from the bank with all the money you'll put into paying insurance and interest on the home. Also, the housing market in America dropped again in December, so things aren't necessarily going up. There is absolutely no guarantee that you will be able to sell your house for more than you owe.
Anyway, saving for a house is really intelligent, so it's good that you're thinking about it and planning for it. I guess my advice is just to not rush into anything. My husband and I have 20% down for the house we are building, and we have that because we saved and planned. Having a decent down payment (not necessarily 20%, but it's a good goal to go after) will save you a lot of risk in buying a house.
My husband and I are saving to go traveling and we do thing like meal plan and "instead ofs".
For the latter-when we want to eat out, go to the cinema, buy a cake etc. one of us will often bring up the "we should really be saving" mantra and the money we would have spent on the treat goes to savings and we get to feel all superior and proud of ourselves :)
We still do things, but less and it's not that hard once you get into it. But meal planning is a MUST! Less meat too. Good luck :)
Ditto, ditto, ditto reading a Dave Ramsey book or taking a class. After we pay our tithing, we take that same amount and put it into savings. I've found that having a money market account instead of a traditional savings account has helped because you get charged if you make too many money market withdrawals per month. Eating less meat and more beans helps a ton! Bountiful baskets (I saw you there once!) has helped cut our grocery bill tremedously (there are 4 of us--2 adults, a 3 year old and an 18 month old); I plan our menu each week based on what we get in the basket every Saturday. Invest in a freezer so you can stock up on things when they're on sale. Check your car insurance premiums--we switched from Farmer's to State Farm last summer and cut our insurance costs in half! Get rid of cable if you can--we just bought a digital antenna so we get free local channels in HD; it's been 2 years cable-free and honestly we don't miss it that much. And then just save, save, save! Think about needs/wants and remember your big goal. It's hard, especially at first, but you get a great sense of accomplishment when you finally reach that goal!
You live in Provo, right? If that is where you are considering buying there is a sweet down payment assistance/grant program available for income qualifying families.
http://www.provo.org/redev.housingassistance.html
It could be worth looking into.
After we had our first baby, I cut down to part-time and our budget shrunk dramatically. I didn't read through every comment above, so forgive me if I repeat. I agree on the automatic transfer to savings. It's like contributing to your 401K at work - if you just do it, you don't realize it is missing after awhile.
Also, I love Costco. (Don't know if you have one near you or not.) We use disposable diapers and they are almost half the price what you would pay in other stores. I wait until the coupon book comes in the mail, then I go grab a box of like 240 diapers for $34. When we had to use formula for our first, buying the generic brand (which is the same as name brand says my pediatrician) is literally ONE FOURTH of the price of Similac or Enfamil in stores. You have to pay to have a membership there, but it is worth it to us. We have the higher membership that is $100 for a year, but you get back a percentage of what you buy. So we got a refund of $85 last year - so our membership was actually only $15.
One last thing I would say is to cut back on daily "needs." We were spending almost $50 on cable. My husband called in and cut down our channels and got a discount for the next year too. So now we pay $26/month for Dish Network - and that is including DVR and HD. Pretty good I think. The same thing can be done with cell phones and internet. Lots of times they don't want to lose your business, so they will give you a better rate just to keep you around. All you have to do is threaten a bit. :)
And truth be told, I rarely go shopping. That helps too. Oh, and the grandmas buy ALL the clothes for our kids because they have the time and money to just go buy things for our girls. (I think it is an addiction. I have only bought maybe 10 outfits total for both kids and the oldest is 2!)
Dave Ramsey all the way!!! I took the class after college and it's helping me get my student loan payments down/paid for. In 3 years I've managed to get them down $5000. Now, during that time, I met my husband, quit my well-paying job, planned/partially paid for a wedding, etc. I now have two jobs because my husband had his pay cut, but we're still doing it. If he gets the job he's hoping to get soon, we're going to buy a house. USDA is an awesome housing program for rural areas that doesn't require a down payment. Look into it in your area to see if you live in an area that is applicable. :-)
Good luck!! Be a gazelle! (Dave Ramsey saying!)
xo,
A
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