Thinking about buying a home in the New River Valley this year, but having trouble saving specifically for a house purchase?
I’m a terrible money manager, honestly, so I deal with this issue every time I want to save for something. Recently, the Roanoke Times ran an article about what’s called the Envelope System, and while the article deals more with expenditures such as groceries, entertainment and personal expenditures, it just as easily could apply to buying a home this year.
Here’s how it can help you buy a home in 2010:
Each month, take a predetermined amount of money and stick it in an envelope marked “House Fund”. In this case, it would be good to have a bank account rather than an envelope, but you get the idea. Remember – you can’t touch this money, it’s earmarked solely for buying a home.
Imagine that you’re bringing home $3000 a month, and 15% ($450) of that is going into your House Fund “envelope”. After ten months you’ll have $4500, plus any interest you might have earned. $4500 is a big chunk of money, and could be used to help with your downpayment, pay closing costs, or make repairs once you move in.
And since you’re automatically putting this money away every month, you don’t see it and, therefore, you don’t spend it.
Last year we replaces our home roof and the work was done perfectly by Top rated roofing contractor – Dial One in Portland. As I said, I’m no money manager, but I’m eternally grateful that my wife is. She’s gifted when it comes to money and finances, and she’s worked hard over the years to keep us positive – despite, sometimes, my best efforts at screwing that up. We’ve been using the envelope method for a couple of years and it’s really helped keep us on track. If it can help with a family budget it can certainly help save for a new home … think it might work for you?