single parent buying a home

Single Parents Becoming Home Owners│3 Steps To Faster Savings

Do You Want A McDouble Or A House?

Are you a single parent currently thinking about buying a home? Does the thought of buying a home sound unattainable and impossible? If you have been struggling to make headway as a single parent and are trying to figure out how to achieve the “American dream” you have heard of I am here to tell you it can be done.  Four months ago, I spoke with someone that said I was probably not going to buy a home for another 8 months and I move into a new home in exactly one month.

As a single parent, there are many sacrifices you make on a day to day basis. More than likely your finances are already stretched as far as they can go and you may be thinking, “How would I even be able to start saving money for a down payment?”

I looked at my finances four months ago and thought the same thing. I was frustrated with where I was at, realizing my savings account was nonexistent.  I asked myself what really was going on with my finances and called a local financial planner and we talked through an expense sheet. Very quickly I noticed how much money was going to non-essentials.

Re-Evaluate Your Expenses

I wrote a note on my desk that read “Do you want a Mcdouble or a new house?” It was that simple. It wasn’t that I was spending my money at Mcdonalds, but that I was constantly allowing a dollar here, four there and it starts to really add up!

You may be shocked to see how much money you actually have when you cut out the things that are not a necessity to your family.

I figured out that I was not going to be able to buy a home at the rate that I was going. I had good credit, but no savings and knew I would need money for a down payment. I found three steps that were necessary to get to buying the first home that worked for me and that may be a good starting point for you as well.

The Goal of Homeownership

Here’s what I did first:

When my paychecks deposited, I changed my mindset. When payday came, I challenged myself to think how much money I could save, rather than how much I could spend.

  1. Paid all bills that needed to be paid on the first, immediately (rent, daycare, and utilities)

  2. Set a budget for groceries and gas until next pay period with a little to spare for miscellaneous things or to roll over to the next check

  3. Moved everything left into savings

Depending on your job and pay, what you move may not be a lot of money, however, starting the habit of moving things over into savings immediately starts to train the brain to pay yourself first and not spend the extra money.

I was able to start by saving about $300 for the month by moving my money over immediately. Once the second check of the month came, I found I couldn’t move as much over due to the rent being due but I stuck to the plan and remained consistent.

The next thing I did: Found a part-time job

This is where the game changed for me. My side job allowed me to bring in $300 extra a month exactly. Any time I made any extra money for anything, birthday, Christmas etc it went to savings as well and I didn’t touch it again.  Maybe you don’t have the ability to work part-time or don’t want to. For me, this is how I was able to cut my time frame down to four months.

  1. Took half of each check and paid down my lowest credit card

  2. Took the other half of the money to put straight to savings

Thirdly, I knew that in order to get approved for a home loan, my credit scores would have to be better. I got both of my credit cards paid down to below 30% utilization and then once that was accomplished put all funds from the side job immediately into savings and watched it grow. If your credit is what is keeping you from buying a home, you may want to speak with a credit advisor about what you can do quickly, in order to maximize your credit scores.

The last piece of advice was probably the hardest for me to do but helped the most. I cooked two meals for the week every week, something different for lunch and dinner and ate the same two meals. If I did go out to eat, it was because I had a gift card or a free meal. Shopping at Aldi and taking lunch saved me the most money while trying to build onto my savings and start to become more disciplined about my spending.

I didn’t want a McDouble; I wanted a house!

Clear to Close

Preparing to buy a home was not easy but it is manageable and if you want to, it can be done. What excites you? If it is having a backyard for your child to play in, I invite you to put a photo up at your office so you can see every day what you are working toward and who you are doing it for. I personally wanted to get my daughter into a great school district and that was the goal so we could move by the time our lease was up.

Prior to November, I didn’t even have $30 in my savings account and now I am moving into my own home. In four months, I did what I thought was impossible! As soon as I changed my thought process about where the money went, everything changed. I used to get a paycheck and think about where I was going to spend the money. Now, it goes straight to savings without even a thought. Yes, you may have one income and the process may seem lengthy, but you will not get there without taking a chance! Cut out the spending, start saving, find a side hustle and start dreaming about all the things you can do.

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credit card debt

Making The Most Of Your Month│Cleaning Up Credit Card Debt

Leaving Credit Card Debt Behind

Credit Card debt is increasing for many American families. According to Experian, most family units with a bank card that consists of over $6,000 in debt. For many, this debt can be hard to manage! Do you keep asking yourself why your debts continue to pile up with little to no headway made month to month? 

One can only crunch numbers so many times over again. You may find that the numbers are rarely moving and potentially increasing without using the cards. Read more on 3 tips to help you get out of debt and manipulate your finances to make the most impact.

  1. Consider Your Budget

Start with being honest with yourself about spending. What can you cut back on the short term? Have you looked at how much you are nickel and diming yourself? It may come as a shock what you find is left over after you cut random spending out.  

List out all of your debts, balances, monthly funds, and due dates. Move money around that is strictly for bills only and the deadlines you have for each. Now, what is left? Is there any wiggle room? Decide what is most important next. 

If you enjoy apps on your phone, Mint now has a great updated app that tells you where you ended up overspending for the month. 

A great rule of thumb is to tackle the lowest credit card first and make a larger lump sum on your payment so that one gets paid down quickly. Once you see one balance start to deplete, the other cards may seem more manageable.  While the funds you had for "other" activities may be small, the thought of not having a cloud of debt following you around is much better!

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  1. Seasonal Job Searching

Also known as the side hustle. Although making a few extra hundred dollars a month may not seem like a lot when you are giving up your free time on evenings or weekends, having a seasonal job that is strict to work to pay the debt off quicker is absolutely worth it. When you have set yourself up on a tight budget and you start working a side job, the money will be a tool to accomplish your goals faster.

Don’t Cut Out all the Fun!

Paying bills is never the fun option however, the freedom from debt will be worth it in the end. If you have found after combing through your finances that you were spending way too much money at the movies or out to lunch, cut back enough to save but try not to completely eliminate everything you do. You may find if you allow for no fun, the budgeting will become harder for you and you will ditch the process in order to continue to live the life you were living. Moderation at this point in the process is key!

  1. Debt Consolidation or Debt Negotiation

You may find terms on the internet about debt consolidation or debt negotiation. There are many companies out there that can do one but not the other. Conduct plenty of research before getting into a company that is for debt consolidation vs debt negotiation. 

Debt consolidation typically means you're actually incurring more debt. The fact is, debt consolidation does not mean debt elimination. These companies are actually just restructuring the debt rather than wiping it away for you. 

If you are wanting to get rid of debt, the quickest way to do so is to delete the items. 

The flip side of this is debt negotiation. Credit Law Center has attorneys on staff that can help you through this process. This is where eliminating debt actually takes place! Negotiating debts down with the creditors you owe help you attain your goals more quickly than debt consolidation will. Remember that never-ending cycle of debt? It will just continue with debt consolidation. But, with debt negotiation, the end may be near!

Following any of these three options listed is a sure-fire way to start knocking down debt and potentially increasing your credit scores. 30% of your credit score is made up of the utilization on your credit cards. Therefore, if you have several accounts that are maxed out, you probably noticed your credit scores are significantly lower than they could be. In all reality, credit plays a major role in our day to day lives. If you find that you are in a place that you need financial or legal advice, please give Credit Law Center a call today 1-800-994-3070.

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