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Ways to save for a down payment

Daily Staff Writer

Welcome Home!BY THETEAM@ELICH.COMFocus on the goal. You must REALLY want to buy a house. Take pictures of your favorite properties and attach them to your fridge, your desk or next to your checkbook. Go out and look at homes within your estimated price range. Dream about living in your favorite one. This dream will make it easier to say no to shopping sprees, buying a second car or going on an expensive vacation.Identify areas where you can cut back on spending. Reduce your highway speed by 10 mph and save 20 percent on fuel consumption. Carpool, walk or take the bus. Clip grocery coupons, especially if your store doubles their value. Take a sack lunch to work and save $8-10/day – or more. Add in every $1 bag of pretzels or midday candy bar and the total savings is close to $3,000 per year. Buy a coffee maker and skip the daily double latte … that could save you almost $1,500 per year. Review your cell phone plan; chances are there’s a better deal than the one you have. The same goes for cable, long distance and internet fees. Skip the babysitter; set up a trade agreement with friends and/or neighbors. Go out less and save the cost of dinner. Stop smoking! Quitting that pack/day habit will save you almost $1,100 a year. Leave your ATM card, your credit card, your debit card, your checkbook and most of your cash at home. Keep a couple of checks in your desk at work, and a $10 bill in your pocket for emergencies. Make only planned purchases.Tell your family you’re saving for a home. If your parents and/or other relatives normally send you presents for your birthday, anniversary or other holidays, they might choose instead to contribute to your down payment account until you reach your goal.Give yourself a pay cut. Arrange for a certain dollar amount to be taken out of each paycheck and automatically transferred to your savings or money market account at your bank or credit union. If you’re self-employed, set up the same type of plan at your bank and have money transferred each month from checking to your special savings account. If you never see it, you’ll never miss it.Reduce credit card debt. Pay at least the minimum due each month on your cards to avoid high interest rates. Better yet, pay each bill in full and completely avoid interest on unpaid balances. Make certain you mail the check (or transfer the money) well in advance of the payment date. A growing number of credit card issuers are hitting customers with late arrival penalties. Ideally, you should wipe out credit card debt as quickly as possible. Begin by paying down the credit card with the highest interest rate and/or highest balance first.When you finally pay off a car loan or student loan or eliminate credit card debt, continue to write a check for that same amount every month – but put it into savings. You’ve learned to live without that money, so now you can sock it away.Place all this saved money into a special savings account, specifically for your down payment. Bank CDs are a good choice. The funds in a CD are tied up until it matures; i.e., you’ll be penalized if you withdraw the money before the maturity date. So, you’ll be less likely to spend this money on something else.Saving for a home can take time, but following these steps may have you signing closing papers before you know it.WELCOME HOME! is compiled each week by the TheTeam@ELICH.COM. Butch Elich has been helping customers with their real estate needs in Summit County for over 20 years, and is the current president of the Colorado Association of Realtors Housing Opportunity Foundation (CARHOF). His team includes office assistant Claire Albers and associate broker Paula Parker. Find the ELICH.COM Team at RE/MAX Properties of the Summit in Frisco. They can be reached at (800) 806-9518 or at butch@elich.com.


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