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Saving for your first home

I was born in New York public housing. We called it the projects or the PJs. The PJs consisted of five to 10 buildings that housed hundreds of families. The buildings were high-rises, some having 15 floors. The people who lived on your floor were like your neighbors. The goal for my parents was to make enough money so they could afford to find an apartment in a neighborhood where the schools were better and the crime rate was lower. As I got older, my parents were able to move out of the PJs and into an apartment on the second floor of a three-family building. Owning a home was a dream that my immigrant parents who migrated to America from Liberia, Africa, could only imagine when their eyes were closed. 

If you have your sights set on homeownership—no matter how distant a goal it might seem right now—I’m here to tell you, from the other side, that it’s totally and completely doable. When my husband and I purchased our first home, understandably, this was a major accomplishment. I never imagined I’d be a homeowner at the tender age of 28, because where on earth would I get a million dollars to buy a home.

Yep, I said million. I always thought you had to make six or seven figures in order to own a home, but I know now this is far from the truth. My husband and I both had very humble salaries before owning our home and we were able to save for our first home in less than two years by making changes to the way we lived and how we spent our money. Here’s how we did it.

Skip the big wedding

The money you don’t spend on a one-day celebration could make a substantial dent in your down payment. My husband and I chose to have a small and intimate wedding with only 32 people including our wedding party on the coast of Miami. Our entire wedding, including my dress, was less than $10,000 and we paid for everything slowly during our year-and-a-half engagement. Following our wedding we had no outstanding balances to vendors or any credit card debt whatsoever, making us the perfect candidates for a home loan.

Live fabulously frugal

If your goal is to save money for your down payment, it’s time to get frugal fast. In an effort to save as much money as possible my husband and I skipped the coffee line in the morning, packed lunches for work, cut down how often we went out for dinner with friends dramatically, took beer and wine off of our grocery list, and we began to shop in bulk at wholesale clubs and shopped for clothing seasonally as needed. I will admit transitioning to a frugal lifestyle is a challenge. We gave ourselves a small weekly allowance to give us some flexibility while we penny-pinched.

Piggy bank

Initially when you begin saving money your determination is at the ultimate high, but as nature would have it, dipping into your savings becomes more and more difficult as the weeks go by. To prevent easy access to our savings I took the old-school, piggy-bank approach and put our money in an online account that wouldn’t be easy to access. If your bank offers a high-yield money market account please do yourself a favor and get one! Initially we saved our money in the bank I banked with since high school, but after doing some research I found a local credit union that offered a 1.5-percent APY which helped us build our savings even faster.

 Out of all of our strategies for saving for a down payment, nothing made as great of an impact as saving the bulk of our income taxes. Prior to saving for a home I used my income taxes to pay for a small vacation or pay off debts or upgrade my life in some way, but with my focus on purchasing a home before my second child was born a priority, my husband and I agreed to save almost 100 percent of our income taxes. We kept about $300 to do something really small for ourselves and every other penny went right into our savings. If you get an annual bonus or commissions at work this is another great way to build up your savings quickly!

The lesson I learned from my savings experience is that it’s not impossible. At first your goal number feels like it’s unachievable but with a plan in place you can absolutely buy a home that is right for you and your family.