How I Bought My First House, Part 1

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Posted by Calli.

Going from renting to buying was quite a plunge. And buying a house at the age of 25 on a single income was pretty ballsy.  But it’s actually more feasible to prime yourself for this kind of investment than you may think……

No two financial positions are the same. We all have different occupations, tax brackets and financial histories.  These 4 bold action items worked for me. Use them as general guidelines – they are flexible and can be manipulated to best serve you:

Capitalize on Opportunities to Save. After moving back home to Dallas subsequent to working for one year in Houston post-grad, I lived with my parents for a few months. I was able to put virtually all of the income from my new job into savings. When I moved out after 5 months to be closer to my office, I lived with a friend and split the rent and all bills in half (and survived without cable without being put on life support).

Build Credit. An easy way to do this is put utilities (the necessary evils of electricity, water and gas) in your name and always pay your bills on time. Another way is to own the title to something, such as a car, discussed below.

 Avoid Debt. Getting a credit card for small purchases like gas and groceries and paying it off monthly is another great way to build credit. But there’s a huge caveat to that, it’s extremely important to manage your finances in such a way that you’re able to pay the credit card balance in full each month. (check out compound interest – it makes a strong argument for my case here).

Minimize Spending on Depreciating Assets. When I think of depreciation the first word that comes to mind is car. I was able to buy a certified, pre-owned car when I graduated with some inheritance money and the help of my mom who loaned me the rest (to avoid interest rates – thanks mom!). I rapidly paid the cash she spotted me back after starting my first job and owned title out-right within a year. This increased my credit score and removed a car payment from my monthly expenses.

This stuff is the tip of the iceberg, but the foundation (more to come on that, literally, later) of attaining funds to buy a home.  Stay tuned for a deeper dive where I’ll talk about things like what it means/how to get pre-approved for a loan, finding the right real estate agent, fun with offers, negotiating and inspections and the imminent champagne brunch upon closing.

Please share some of your saving hacks below (so I can replinish my savings!)

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