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#1 of 11 Old 03-19-2012, 05:38 AM - Thread Starter
 
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Hi all! I hope people can give me some good ideas. I started working in October, and have a decent salary. I want to start saving my money to buy a house or a condo (a small one - its just me and ds), and wanted some ideas on how to cut my expenses down.

 

The biggest thing is getting rid of daycare expenses, my ds is 3yo and will qualify for free pre-school in September so I'm trying to get him in somewhere (I probably will, but the lottery system means I won't know until much later).

 

How do you keep grocery expenses low? I pack lunches (altho easy lunch ideas for spring/summer would be welcome, I'm tired of my winter dinner ideas, and its warm here so I don't want to cook anymore than necessary), keep yogurt and granola at work for breakfast, as well as granola bars for snacks.

 

I'm trying to come up with a budget, but I'm having trouble with that. I'll try to post a budget later, so that I can get some help with that.

 

But, Ideas? What are your biggest money savers?

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#2 of 11 Old 03-19-2012, 10:44 AM
 
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Biggest money savers:

PAY YOURSELF FIRST.  Open an account for 'the house' and put money in there first.!!

You are already packing breakfast and lunch so that's great.

Do you have debt?  Work on paying that off too.

Don't be fooled by not having daycare, there is usually before and after care expenses, school expenses etc.  While those are less than full daycare it does add up.

I don't think you have a car so nothing to cut there

Make a budget, track every penny you spend for a couple months, see where your $$ goes then you will really be able to see what you can cut out.!


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#3 of 11 Old 03-19-2012, 12:08 PM - Thread Starter
 
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Quote:
Originally Posted by zebra15 View Post

Biggest money savers:

PAY YOURSELF FIRST.  Open an account for 'the house' and put money in there first.!!

You are already packing breakfast and lunch so that's great.

Do you have debt?  Work on paying that off too.

 

Only student loan debt. And I qualify for income based repayment, and 10 year loan forgiveness (assuming I don't change jobs). Right now I'm in deferment due to a period of unemployment after graduating. So, those payments will be under $200/month, and will start in June or July.

 

Don't be fooled by not having daycare, there is usually before and after care expenses, school expenses etc.  While those are less than full daycare it does add up.

 

Daycare in my city is $1400/month. I pay half. Before and after care (I'm hoping to be able to only use one or the other) is less than $400/month, and I'll still only pay half (because of child support order), so the difference will be HUGE, and will save me alot!

 

I don't think you have a car so nothing to cut there Nope! I use public transit, and my monthly commuting costs come directly out of my paycheck, and are pre-tax.

 

Make a budget, track every penny you spend for a couple months, see where your $$ goes then you will really be able to see what you can cut out.!


Yeah, I really need to track my money. I also need to get back into menu planning, since thats really helpful.

 

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#4 of 11 Old 03-20-2012, 11:55 AM
 
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Super Single:  I would also set a liberal time frame for yourself so that saving and cutting back don't seem so ominous.  DH and I bought our co-op pre-child, so we had a slight advantage there, but we also decided to do a three-year goal.  That particular time frame may bum you out, but it also gives you time to adjust to saving a certain way.  Maybe a two-year plan?  I think ultimately you need to start looking for the type and price of place you want, and then start figuring out how much you can ultimately put down.  In many cases, you'll be required to put 20 percent down, in other cases, only 10 percent.  How much you put down, though, will affect the amount you will pay in mortgage (if mortgage is the route you want to go).  Also consider closing costs, which even if you handle your own closing (as a lawyer) there will be the closing costs required of the seller or the bank.  You've probably already thought of this but that's just my two cents.

 

I'm just making up numbers here, but say you want to buy a $200k condo (given housing costs in DC), I would expect that you would need to save about $50k (assuming you put 20 percent down plus figure in other costs).  This is just an example, but give yourself a realistic time frame and figure out how much you can save within that time frame.  I agree with Zebra that you should designate an account just for those savings. 


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#5 of 11 Old 03-21-2012, 08:08 AM - Thread Starter
 
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Sigh....Thanks CatsCradle. I'm hoping I can come across some deals for first time home buyers. I make an OK salary, and if I cut back to only necessity's, I can save a significant amount each month - but it would take me over 10 years to get to 50k. Especially since I won't be getting huge tax returns any more (I don't think I will qualify for the earned income credit anymore, since I make just barely too much). And in 10 years my city will be too expensive to buy in (its one of only a few places that didn't take much of a hit in the housing market, and that is actually recovering super fast - the "affordable" neighborhoods are gentrifying so fast that I would need to buy within 2-3 years to have even a chance at affording it).

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#6 of 11 Old 03-29-2012, 11:32 AM
 
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those numbers are not the whole story! Look into FHA loans, and local homebuying assistance--almost all cities will have something like this, especially for first-time homebuyers. Even without any special programs I got an FHA loan that only required a 3.5% down payment. The only thing I can see standing in your way is your short employment history, so if you start looking into this stuff and saving now, in a year or two you should be in a great place to get a home. Check out your library to see if they've got any seminars about this stuff, or know where you might go to find out more. My other recommendation, if you can swing it, is to look at 2-unit buildings. Our mortgage now, including taxes, comes in at about $200 more a month than we used to pay to rent an apartment nearby. Our tenants pay us $800 a month, plus we split the cable. When it all gets sorted out (and not figuring in either the tax pros and cons or the costs of repairing various things) we're paying almost exactly what I used to pay to rent a room, only we own the property and will probably get back at least what we put into it when we decide to move.

As for keeping expenses low, do you use coupons at all? If you enjoy doing that, you can make a game of it and save a lot, especially on toiletries. There are lots of blogs that will explain exactly what to do--just look for some that are local to you so their matchups work at your local stores. Alternatively, the more prep work you do (soaking and cooking beans, making your own granola bars, etc) the cheaper it usually is to eat.

Good luck! Im sure you'll achieve this in no time!

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#7 of 11 Old 03-29-2012, 12:58 PM
 
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There should / could be programs around, hopefully.  I would aim to save for 5% down and also another 3500-5000 for closing costs. And then work on 10% down. BUT if you find the right house and the right program and the right time and you have 5%, then you have the option of making an offer / buying or continuing to save for more down. If you are getting gifted  money for down payment, they will still want to see some of your own savings.  IF you have a 401K or some kind of retirement savings, this is favourable too, not that you would use it, but shows as money in reserve.

 

 


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#8 of 11 Old 04-04-2012, 12:58 PM - Thread Starter
 
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Quote:
Originally Posted by prettyisa View Post

those numbers are not the whole story! Look into FHA loans, and local homebuying assistance--almost all cities will have something like this, especially for first-time homebuyers. Even without any special programs I got an FHA loan that only required a 3.5% down payment. The only thing I can see standing in your way is your short employment history, so if you start looking into this stuff and saving now, in a year or two you should be in a great place to get a home. Check out your library to see if they've got any seminars about this stuff, or know where you might go to find out more. My other recommendation, if you can swing it, is to look at 2-unit buildings. Our mortgage now, including taxes, comes in at about $200 more a month than we used to pay to rent an apartment nearby. Our tenants pay us $800 a month, plus we split the cable. When it all gets sorted out (and not figuring in either the tax pros and cons or the costs of repairing various things) we're paying almost exactly what I used to pay to rent a room, only we own the property and will probably get back at least what we put into it when we decide to move.

As for keeping expenses low, do you use coupons at all? If you enjoy doing that, you can make a game of it and save a lot, especially on toiletries. There are lots of blogs that will explain exactly what to do--just look for some that are local to you so their matchups work at your local stores. Alternatively, the more prep work you do (soaking and cooking beans, making your own granola bars, etc) the cheaper it usually is to eat.

Good luck! Im sure you'll achieve this in no time!


I don't do much couponing, but I do want to get into it a little. I try to use the weekly circular, and shop sales. What I should do is shop twice a month when my ds is visiting his dad - then I can spend more time on it and be more thrifty.

 

As for the 2-unit place - I am NOT ready to be a LL! My parents are LL's, and I'm just not ready for it. Also, in my city, if I were to purchase the Condo I am renting right now, my mortgage would be about 300-400 less than my rent. So, I'll definitely have to look into it more (of course I'm just now starting to seriously try to save, so I haven't done much research since I'm not even looking yet, just saving).


 

Quote:
Originally Posted by SunRise View Post

There should / could be programs around, hopefully.  I would aim to save for 5% down and also another 3500-5000 for closing costs. And then work on 10% down. BUT if you find the right house and the right program and the right time and you have 5%, then you have the option of making an offer / buying or continuing to save for more down. If you are getting gifted  money for down payment, they will still want to see some of your own savings.  IF you have a 401K or some kind of retirement savings, this is favourable too, not that you would use it, but shows as money in reserve.

 

 



Thanks! I am starting a retirement fund, but have only just started it (last paycheck was the first contribution!! I feel like such an adult) I likely won't be gifted the down payment (I would be positively SHOCKED if that were to happen - I've been gifted alot of money the past few years due to custody battles, being an unemployed single mom - this is definitely going to be on my own).

 

Right now I'm saving $500/month minimum, but trying to up that to 700-800, and once my ds is in school in the fall I'll really be able to save since my daycare expenses will go down significantly (from my half being $700, to the total being $600 at the high end!). So I'm looking forward to that.

 

Sorry it took so long to respond! I forgot about this thread... :)

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#9 of 11 Old 04-04-2012, 02:12 PM
 
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Hi Super! I applaud you for your goals.

 

You haven't posted a budget, and it sounds like you are pretty frugal already. One big expense at our house is phone/internet/cable. I'd look at ways to reduce those costs as much as possible.

 

I also agree with depositing the savings in an account on payday, so you have no choice but to work with what's left. Obviously if you get in a bind you can withdraw, but try to treat it as "out of sight, out of mind - and out of range!"

 

Other typical expenses - clothes and haircuts. When my sons were that age I bought a clipper and cut their hair myself. When I was in college I got my hair cut at a beauty school for cheap. Your ds doesn't need a lot of different outfits - if you can get clothes at garage sales or thrift stores, you can save big.

 

Good luck to you!


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#10 of 11 Old 04-05-2012, 01:14 PM - Thread Starter
 
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Ok, I'm going to post my approximate budget:

 

Rent: $1500/mo (this includes ALL utilities, except phone and internet)

 

Groceries: $350/month (this is my max - I try to spend under $300, and sometimes succeed - but this is also my eating out budget for when I just can't deal and don't want to cook)

 

Daycare: $700/month (this is my half, my ex sends his half directly to the daycare)

 

Phone: $50 (I'm on a family plan with my parents, this is an iPhone with unlimited text/data/talk - my dad pays what he would pay if he had an individual plan, and I pay the difference that my phone adds, its a good deal!)

 

I don't have internet or cable (we don't own a TV), my commuting money comes out of my paycheck pre-tax, as does all health insurance. My income below is MINUS all of that. The paycheck I listed is my NET, not my gross.

 

Monthly income:

 

Monthly paycheck: $2,400

 

Reimbursement from my Dependent Care Account: $416

 

Child Support: ~$500 (This is currently going into a savings account that I don't touch - My ex does not necessarily have stable employment even though he is a lawyer, so I need to learn to live without this, and I'm trying to use it to build a nice rainy day fund)

 

Current Savings:

 

2 months of child support, plus $2,000 of my tax return went straight into an emergency fund, that I am trying to add at least $50 to each month.

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#11 of 11 Old 04-08-2012, 07:47 PM
 
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SSM- I know this is an approx budget and you don't need to update but:

 

what is the cost to NYC and back?

Clothes- both you and Lincoln and personal care stuff ?? Hair cuts, IDK if you need your nails done for work etc?

Do you have any medical costs- co pay, rx etc?

Is your 'grocery' everything or just food.  Is non food stuff in there too, soap, tp, detergent etc?

 

Just some questions to think about.  I'm always amazed how much the little things add to an already tight budget.


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