How to Save Money for a House: a Step-by-Step Plan

Have you always dreamed of being a homeowner? It’s time to turn that dream into a reality. Stop imagining and start saving up for a down payment with this step-by-step plan from the financial advisors at American Investment Planners:

• Step 1: Figure out how much you’ll need to save. First things first, you need to figure out (roughly) how much money you need to save. As a rule of thumb, your housing expenses should not exceed 25-30% of your monthly income. This includes mortgage principal and interest, taxes, and insurance. You should also aim to save at least 20% for a down payment; this much money is not required, but it will help you earn better interest rates.

• Step 2: Open a savings account. Next, you will need to open up a savings account so you have a place to hold your money. Keep this account separate from your traditional savings account or emergency fund, but consider opening it at the same bank for convenient e-transferring capabilities.

• Step 3: Create a budget. Make a detailed list of your monthly income and expenses. After calculating the necessary bills and other costs, how much money are you left with? And how much of this leftover cash can you comfortably put towards your new home each month? Make sure to keep your budget somewhat flexible for unexpected occurrences. You can learn more about creating a budget here.

• Step 4: Make your monthly deposits. Congratulations, you’ve determined how much money you need to save each month to meet your goal. Now comes the hard part: actually saving it. Setting up automatic deposits can help you put away your money before you accidentally spend it on something less important.

• Step 5: Save 100% of your windfall money. We all have those occasional events that bring us some extra cash: holidays, birthdays, special celebrations, work bonuses, and income tax returns just to name a few. Put 100% of this “extra” money towards your new home to help expedite your savings plan.

• Step 6: Check your credit score. When you start to make significant progress on your goal, it’s a good idea to sit down and check your credit score. A better credit score means lower mortgage rates, and since poor scores can take awhile to improve, it is something you want to address as early as possible.

• Step 7: Sit down with a real estate agent. Once the time comes when you are almost at your goal and your credit is in good standing, it’s officially time to sit down with a real estate agent and start looking for a new home. They can help you determine if your savings are sufficient, shop for mortgage rates, and show you qualifying homes in your area. Happy house hunting!

Are you having trouble planning and saving for a new house? The financial advisors at American Investment Planners, LLC can sit down with you and help construct a plan that meets your needs and budget. To schedule an appointment with one of our consultants, please call (516) 932-5130 or email info@americaninvestmentplanners.com.

Ways To Save Money At College

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When it comes to college and money, figuring out how to save for tuition costs is only half the battle - once those are covered, students must find ways to save while they are living the college life. Though they may have a part-time or full-time job while attending school, bills sure do add up fast when you factor in the cost of supplies, transportation and so on and so forth.

Should you have a child preparing for their first day of college, or if you've come across this post because you're getting ready for the college experience yourself, below are a few tips that can be used to save:

Buy used instead of new: Textbooks are known to be one of the biggest expenses for college students. To reduce your textbook costs, always look for used instead of new, and always opt for renting when possible. And if your school's bookstore doesn't carry the reading material you need, don't hesitate to look online or at local stores instead.

Research meal plans first: If you'll be living on campus, chances are you'll be required to purchase a meal plan. However, while choosing the most expensive option may put your mind at ease knowing you have more than enough to cover the cost of breakfast, lunch and dinner, don't forget that you may wind up with leftover funds that you can't use at the end of the school year (not to mention, what if you aren't crazy about the food?). That being said, your best bet is to do some research and find out what types of food your school offers and for how much before selecting a plan.

Carpool and minimize driving time: Planning to commute? Then find a friend to carpool with! Additionally, try and plan your schedule so that you don't find yourself with hour breaks that encourage you to drive home. Even if you live nearby the college you attend, every trip back and forth uses gas (and money) that you could be saving.

To learn other ways that you can save money while at college, check out this article from U.S News and World Report MONEY.

Aside from how to save money during the college years, are you seeking information and guidance on how to save for tuition? To put together a savings plan that will benefit you financially, be sure to give us a call at (516) 932-5130 to start speaking with a member of the American Investment Planners LLC team today!