The 6 Easy (ish) Budget Choices That Helped Me Buy a House

published Jun 23, 2019
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When I got serious about saving for a down payment for my first home, I struggled to find areas I could cut from my budget. I was making $38,000 a year working at a daily newspaper in Boulder, Colorado. I needed to keep my car to get to and from assignments (our intern crashed the last remaining newsroom vehicle—oops!) and the job required a good cell phone plan for live Tweeting and shooting video.

Without much wiggle room in my budget, I took on a second job as a bartender. For the most part, that’s how I was able to afford a $40,000 down payment.

But even with a second job, saving wasn’t easy. With bartending comes singles and fives that quickly add up. I wanted to make sure I didn’t experience lifestyle creep (i.e., as my income increased, I didn’t want former luxuries to become necessities.) After all, the goal was to save for a home before I got priced out of the Denver-area housing market.

So, to keep on track with my savings goals, here are six budgeting strategies I enacted. I asked Logan Allec, a Certified Public Accountant, personal finance expert, and founder of Money Done Right to offer some financial feedback on whether these tips are actually worthwhile.

Buying a home is such a unique situation. For me, it was absolutely necessary that I bring in more income. While these budgeting tips alone wouldn’t have allowed me to put 20 percent down on my home, they did help me reach my goal faster:

1. I skipped going out to eat and socialized on the trails

The part of my budget that was super easy to slash? Happy hours, brunches, and dinners out with friends. According to the Bureau of Labor Statistics, the average household spent $3,008 on food away from home in 2015. Granted, I’m not an entire household, but I definitely reasoned I could save a significant amount cutting down on eating out. Besides, I enjoyed the socialization more than the actual pancakes or beer.

So, I started asking my friends if we could instead go for a hike. Colorado is blessed with a lot of trails, and we get sunny days even in the dead of winter. A friend who I regularly brunched with joined me in volunteer-walking humane society dogs (#dreamjob) one evening each week. I also joined a women’s basketball league and it only cost me $40 for eight weeks of fun with friends.

What our expert says: “I think this is a great tip,” Allec says. “Many people don’t realize how much of their paycheck is going toward food and drinks (especially drinks!) Inexpensive, healthy activities such as hiking are great alternatives to kick expensive brunch and happy hour habits.”

2. I had a mini potluck at lunch every day

The newsroom where I worked was on a pedestrian mall. Before I got serious about saving, I would grab lunch two to three times a week at a local deli or Chipotle, spending probably $30 a week, or—gulp—$120 a month.

My best friend worked for the same newspaper and once I shared my savings goal with her, we decided to start mini, two-person potlucks each day. She’d bring in her leftovers from the night before, I’d bring in mine. There we were—just a couple of gals on budgets—having a smorgasbord in the breakroom while our co-workers set off to lunch or heated up microwave meals.

I liked this budgeting strategy because it kept me from getting bored from eating the same thing all week long. It also held me accountable to actually cooking. If one person doesn’t pull their weight at a two-person potluck, it’s very obvious.

What our expert says: “I think this is another great food-related tip,” Allec says. “When setting a food budget, many people try (and fail) to stick to a rigorous cooking routine. But they quickly get discouraged or bored with their schedule and go back to their old habits of unhealthy fast food or expensive restaurant meals.”

3. I made weekly cash deposits

I took weekly trips to the bank to deposit my cash tips. It was more of a mental trick: I always felt motivated to reach the next $1,000-mark in my bank account. I found myself picking up an extra shift or staying a little later when I was close to a savings milestone. I kept my bartending money in a separate savings account at my credit union where it was earning one percent interest (which, I learned from Allec, is not great).

What our expert says: “If the funds are left in the brick-and-mortar bank where the cash was deposited, I would say you one could do a bit better by then transferring their deposit to an online bank where you will likely enjoy a higher interest rate on their savings,” Allec says. “While this may not have been the case when you were saving for your home purchase, in today’s environment you could easily open an online savings account and earn over two percent interest.  That may not sound like a lot, but on a $1,000 deposit, that’s $20 per year, and that’s excluding compounding. On a $10,000 deposit, that’s $200. And if you’re sitting on a $50,000 down payment, that’s $1,000 per year!”

4. I held off on getting a dog

I very much wanted a dog. But I was working two jobs, and it wouldn’t be fair to my furry friend. Also, I knew I’d need an emergency savings fund and extra monthly expenses for food, medications, vet visits, and all of the toys. So I delayed adopting a good boy (or girl).

Don’t worry, this story has an happy ending: As I got close to my home savings goal, I adopted a red Boston Terrier from the MidAmerica Boston Terrier Rescue and we live happily ever after in a home with a yard where he likes to sunbathe in his signature plaid bowties.

What our expert says: “Apart from the financial concerns of caring for an animal, pets also require a lot of time from their owners, which could take time away from income-producing activities like a second job or side hustle,” Allec says.

5. I stopped buying new clothes

The “lifestyle creep” from bartending was hard to avoid working near a pedestrian mall. When I’d get off work on a weekend, I’d dip into the nearby fast fashion stores, and buy a dress or top or pair of jeans that I didn’t need. After realizing how much I was spending, I nipped this in the bud pretty quickly. I started following a few fashion blogs to learn how to get the most out of my own closet. When I did grow tired of what I had in my closet, I’d spend $10 on a new shade of lipstick or a pair of statement earrings. These mini “splurges” allowed me to feel like I had something “new.”

What our expert says: “Rewarding yourself with inexpensive ‘splurges’ rather than big-ticket purchases can be a great way to encourage you to reach your goals as well as save money every month.”

6. I cut WiFi from my budget (*gasp!*)

As a representative of the elder millennials, I groan when I hear people saying we just need to give up avocado toast and streaming services if we ever want to buy homes. (Let’s wag our fingers instead at student loan debt, high rent, a shortage of starter homes, etc.)

But, yes, I did give up Netflix. And, I gave up WiFi…

If I needed to use the Internet, I went to the business center in my apartment complex. I also had an unlimited data plan on my cell phone. Before giving up WiFi, I had been paying $68 a month, so I saved almost $2,500 during the three years or so I went without WiFi (more if you add in Netflix, too, but I don’t want to indulge those who think Netflix bills are causing millennial money woes).

Honestly, I didn’t miss it much. When I wasn’t working, I wanted to be outside and I was also playing basketball and coaching a youth basketball team in the nooks and crannies that were available in my schedule.

What our expert says: “This sounds like it is a great tip in this specific situation—why pay for something you wouldn’t use anyway if you have another option to get Internet access?” Allec says. “But I wouldn’t recommend this as a general tip for everybody to follow. For example, there are so many opportunities these days to make money using the Internet. I think one might be foolish to forego a monthly WiFi bill if they could end up making an extra $500 online. But on the other hand, foregoing WiFi could also mean avoiding wasting countless hours on YouTube watching nonsense videos. This one really depends on your personality: Would you use your in-home WiFi to better your financial situation, or would it likely result in a lot of wasted time?”

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