Three years ago Jim and Carrie only dreamed of owning property. They were in debt, had little savings and felt lost.
Within 24 months they actually bought their first home despite facing real financial challenges. Here is how they did it – and how you can replicate their success.
When I met Jim and Carrie they were in their early 30s. They had some credit card debt, student loans, a little savings and a strong commitment to buy their first home as I said.
Fortunately, Jim had a very good job and they were putting up some nice numbers every year. But because they weren’t tracking their spending, the money sort of got spent each month without a whole lot of oversight.
The first thing the couple did was create a financial plan. This helped them establish priorities and was a critical success factor.
Are you interested in buying your first home? Here’s how you can get my help in putting together a plan to help you do that.
As I said, they did have some savings but it wasn’t enough for a down payment. Just the same, they didn’t give up. They figured that if they could shift $1,000 a month from spending to saving, they’d have enough to buy their casa within 3 years.
Because they had a plan and were tracking their spending, they knew they could do this. So they did.
First they paid off their credit cards with the extra $1,000 a month and then put everything they had towards that down payment. The actually hit their goal of having enough to purchase real estate within 2 years of starting their plan and bought their house last year.
If you were born between 1980 and 2000 you are in the Millennial Generation like Jim and Carrie. And just like that couple, you have a great opportunity to buy your first home right now. Prices are still relatively low in many parts of the country and interest rates are still near historic lows too.
The problem of course is coming up with the money for the down payment like Jim and Carrie and then qualifying for a mortgage.
I’ll admit that overcoming these obstacles is no walk in the park.
Banks are more careful about making loans, it’s more difficult to find high-paying jobs and many people are saddled with student loans. If you have these challenges here’s what to do:
1. Gather The Right Information and Make A Plan
Jim and Carrie could never have done what they did without planning it out first. They had to know what it cost them to live, how much they currently save, how much they could potentially save, how much it would cost to really be a homeowner and how much it would cost to buy the kind of home they really wanted to live in.
2. Create Capital
The quickest way to create capital is to slash your spending every possible way and automate your savings. Jim and Carrie did both these things.
Of course they focused on reducing their credit card interest expense first. In their particular case, they took money out of savings and paid off the cards immediately. If you don’t have the scratch to do that, you can still take some very aggressive action to get out of credit card debt very quickly. By the way, you might not need as much capital as you think. In some cases, you can use seller-financing, slash the amount of capital you need and speed up the process by years.
3. Go Back To Your Priorities
You may not be in the same situation that Jim and Carrie were. But if you are as determined as they were, you can still make your dream of owning a home come true. But you have to be flexible.
Many millennials live in urban communities where it’s expensive to live and hard to find jobs. If buying a home is goal #1, are you willing to relocate?
According to the National Association Of Realtors, the median demographic of a millennial homebuyer is a person 29 years old who earns $73,600 a year. This person (or couple) bought an 1800 square foot home for $180,000.
You may not fit that description perfectly, but if you are willing to really look at your spending, take decisive action to build up a nice down payment, get out of debt and are flexible on where you build your future, you can absolutely achieve your goal within 3 years just like Jim and Carrie.
Are you trying to save up to buy a home? What is your biggest obstacle?