From outstanding credit card debt to massive student loans, financial difficulties are barring more and more millennials from becoming homeowners. While the vision of buying a first home may seem hopelessly far away for many, there are strategies available to make it happen. These expert tips can help turn those dreams into reality.
Tips for Saving Money
Consider replacing plastic with cash
One excellent strategy for saving money is to spend two weeks (or a month, if you’re feeling ambitious) paying for everything in cash. It’s easier to rack up debt when using credit cards because the deductions are all digital. When handing over cash, you physically see and feel the money leaving your wallet. Using cash can help train your brain to associate your spending habits with actual money being spent, and it’ll inspire you to start holding onto it.
Multiple debts can feel paralyzing. The trick is to start attacking the smallest balance first. Paying more than your minimum required payment and making more frequent payments can save on interest for that balance and offer some stress relief. Once you’ve decimated that debt, start applying the same strategy towards the next smallest balance. Rinse and repeat.
Make budgeting a game
One way to make budgeting more tolerable is to turn it into a game. Challenge yourself to only spend a certain amount each week on, for example, takeout. The key is to try to hold yourself accountable for every dollar you spend.
Watch automatic deductions
Many conveniences are automatically deducted from bank accounts annually and monthly, especially for millennials. Services like Netflix, Amazon Prime, gym memberships, and phone bills can drain your bank account — but they don’t have to. First, make a list of all your automatic deductions. It might be shocking to see all of them all added up. Next, decide how many of them are necessary or benefit you. Cutting even one service out can start to make a difference.
Tips for Saving on Homeowners Insurance
Add security features
A great way to cut down on your homeowner’s insurance premium is to install an alarm system or other security features in your home, There are plenty of affordable systems on the market these days, including custom design options available from SimpliSafe. Decreasing the risk of burglary will give you peace of mind and a noticeable break on your insurance bill, too.
Share your space (and rent)
Being a homeowner doesn’t have to mean paying for an entire house by yourself. Besides buying a two-bedroom apartment, other options exist for sharing a home and cutting down on costs. Planning to rent out a room in your home is an easy way to throw extra money at your premium each month. Some new homeowners also choose to split a duplex with another tenant, rather than buying a single-family home.
Newer homes may come with bigger price tags, but they also have the advantage of cheaper insurance. New buildings pose less risk for insurance companies, so premiums are lower. Although that 1972, recently renovated house looks charming and like-new, be sure to weigh the cost over time versus a more recent build. Things like plumbing and a new roof may have been overlooked during the renovation and both of these can come with big price tags.
Working with an experienced independent insurance agent is the best way to save money on homeowners insurance. An agent knows how to shop the market and find the best deals for you, as well as tricks to lower your premium even further. They can also hook you up with a policy that meets your unique needs.
The post The Millennial’s Guide to Buying a Home: Budgeting and Insurance appeared first on MintLife Blog.