When you were growing up your parents probably told you that owning your own
home was a staple of being an adult yet here we are years later and the closest
many millennials can get to being a homeowner is living in their parents
basement and praying that they end up in someone's will well if you ask me one
thing holding back most young adults from buying their own home is having to
spend a fortune on rent every single month which is why i'm going to be
walking you through step by step how to save up money to buy a house while
renting so you can become a homeowner in no time you see i never really
understood why my parents used to be so adamant on me owning my own home until i
finally became a homeowner myself the simplest way to describe my feelings
around owning my own home can be summed up with one word pride i was proud that
as a single person i could afford all the costs of owning a home and trust me
there are a lot of them since owning my own home i've had to deal with faulty
electrical broken appliances gas leaks and the like however the benefits of
owning your own home do extend beyond just feeling good about yourself for
instance you can start gaining the appreciation your home's market value
provides and potentially rent out part of your home in order to subsidize your
costs needless to say there are a ton of benefits that you gain when owning your
own home but there's one that in my eyes stands out the most i remember like it
was yesterday it was on a first date which i'll admit i don't get many of and
my new female friend and i were laughing and having a good time things were going
well and then she asked me if i had my own place i
slowly sank into my chair and admitted that at 27 years old i still didn't own
my own home the second i said this her mood instantly changed and about five
minutes later she excused herself and walked out on the date it was at this
moment that i realized that i needed to get serious about buying a house fast
forward a year later and using the steps i'm about to share with you i was able
to become a homeowner for the first time despite the challenges that come with
saving money while renting on route to breaking out of the renters right and
finally becoming the proud homeowner that i am today i ended up developing a
home buying strategy that i believe is the most powerful tool that anyone can
utilize to streamline their path to home ownership i call this model the depth
model the depth model is a five-step model that will take you from a hopeless
renter to a proud homeowner in the shortest time frame possible however
this will only be possible if you progress properly through each of the
five steps i'm about to share with the fifth and final step being the one that
will make or break your chances of ever owning a home so the first step in the
depth model is the elimination of high interest debt i'll be the first to admit
that it's really hard to put a finger on whether debt is a good thing or not when
it comes to managing your finances some financial gurus will tell you that debt
is the devil while others will claim that it's the best wealth building tool
out there easy to feel confused right well one form of debt i think everyone
agrees is detrimental to your financial success is high interest debt this debt
typically comes in the form of auto loans credit card debt and dairy even
say payday loans now i'm sure you can already somewhat understand why having
high interest debt holds you back from saving for a house if every month you're
sending hundreds of dollars to a creditor that's hundreds of dollars you
aren't putting away for a down payment instead however i truly don't think
people appreciate just how crippling this type of debt can be in their quest
to own their own home for instance if you had the average american credit card
debt of six thousand dollars and made the minimum payment of two hundred
dollars every month it would take you 40 months for you to pay it off and would
have you paying over two thousand dollars interest or one third of your
original balance that's literally two thousand dollars a handing over for
nothing that you could put towards significantly making yourself closer to
amassing the down payment you need to go escape the renting right and finally own
your own home if you're all about keeping more money in your pockets and
giving lots to credit card companies then gently tap that like button below i
really appreciate it this is why if you do presently carry high interest debt
you need to get rid of it as quickly as that girl who triple texts you every
hour right after meeting her to do this sort your debts by the ones with the
highest interest rates and then starting to pay those down first keep this up
until all your debts have been paid off because trust me being debt free will
make saving for a home especially while renting a thousand times easier the next
step in the depth model relates to your expenses which you want to cut down to a
bare minimum in order to afford the down payment for your future home now
contrary to all the [ __ ] savings advice out there these days i'm not
about to tell you to cut out coffees or start recycling your bath water i want
you to see real savings progress and this is achieved by focusing on your big
three expenses first minimize your current rent costs this may require you
to downsize or sublease part of your place both of which aren't ideal but
will help massively in your quest to owning your own home next aim to
minimize your transportation costs it's sad to say but some people will spend as
much money on their car every month as their rent and then they wonder why they
simply can't break out of the renting right they find themselves in in my
opinion opting to use public transportation over owning a car is the
easiest way to exponentially increase your ability to save every month while
working to buy a home for instance when you own a car you are regularly
incurring costs like car payments gas maintenance insurance and the like
owning a car every month can easily cost you upwards of a thousand dollars now
compare this to the average monthly transit cost in the united states is 67
and you can see that you can easily be saving hundreds of dollars a month by
being okay cozying up against a few friendly strangers whenever you need to
get around town finally you need to keep your food and entertainment costs in
check let me tell you that fancy dinners and regular trips to whole foods better
known as whole paychecks probably won't be in the cards for you while you're
working to save to buy your home when combining these two expenses on average
cost americans 750 each and every month that's almost as much as my mortgage
payment now of course you need to eat but even saving half that money by
reducing how much you eat out will still save you plenty of money every single
month that you can put towards saving for your dream home the next step in the
depth model is your plan if you ask me it's kind of sad that you even need to
have a plan to buy a home but with how inflated the real estate market is these
days you need to be tactical in your home buying approach as such the first
type of plan we need to look into are home buying plans well general wisdom is
to put down 20 when buying a home this can be a hurdle to many people and as
such you should be at the very least looking into options like fha mortgages
these types of mortgages allow you to put down a smaller down payment because
they are backed by the government to give first-time home buyers a better
chance of getting into a home the other part of your home buying plan should be
to find ways to access the funds you'll need to make that down payment for
instance in the us every first time home buyer can withdraw up to 10 000 out of
their traditional retirement account or ira or roth ira without paying the 10
penalty for early withdrawal keep in mind however that if you don't repay the
money within 120 days and you're under the age of 59 and a half then that
withdrawal becomes subject to the 10 penalty and will be included in your
income for tax purposes now the final part of the planning process is to
understand how much your costs will vary when you switch from renting to owning
the major expenses most people have to adapt to are taxes and renovations and
repairs when you rent you simply hand over your money every month and move on
with your life however when you own a home you'll be constantly beaten down by
rising property taxes and the fear that your furnace will stop working or that
your roof will rip off as such calculate your anticipated costs as a homeowner
before making a significant life change the fourth step in the depth model is
timing well i would never advise that you try and time the stock market time
in the real estate market may work in your favor i know that when i bought my
home people have been telling me to wait as they thought that the prices of homes
would decline as the pandemic raged on well home prices in my area rose
significantly during that time and if i would have waited i would have ended up
being priced out of the market entirely therefore when transitioning from
renting to buying assess the price trends in the market you want to buy in
if the prices are rising quicker than you can save it may make sense to buy
sooner versus waiting and potentially being priced out fortunately one thing
you will never be priced out on is hit that subscribe button below and if you
haven't already then feel free to do it right now i really appreciate it now the
final step in the depth model is achieving a heightened income so far
i've shared with you multiple strategies that you can use to satisfy more money
in your pocket each and every month however nothing will do more for your
savings efforts than making more money i know for myself personally i used to
think that if i just saved diligently i would never run into any financial
issues boy was i wrong even me someone who lived at home for many years and
works as a cpa didn't exactly have the easiest time buying home given how hard
it is these days to save up enough money to buy even an average priced home for
reference the average home in the united states was just under 350 000 as the
2021. if you're to put down 20 when buying they require you to hand over 70
000 the average household as of 2021 saves
six thousand dollars a year raises and promotions aside which your bosses
probably won't end up giving you anyways at this savings rate it would take you
over 10 years to be able to amass the down payment for the average home
however here's the catch after those 10 years have passed that 350 000 home
would now be worth 700 000 meaning your down payment will have to
be even larger to actually be able to go through with the purchase this is all to
say that you need to find ways to amass your down payment in short order the two
ways you can do this if you aim to transition from renter to homeowner in
the next couple of years is to either pick up a second job or freelance i
personally prefer freelancing because you usually make much more money per
hour than if you were to work a second job however you do need sales skills so
there is a trade-off that needs to be considered when contemplating this line
of work either way you'll probably have to be spending the bulk of your waking
hours working if you do want to end up buying a home but here's why it's worth
it once you do get into your own home you can start to ride the wave of
appreciation that current homeowners have been enjoying and use that
appreciation to support future home purchases in fact it's kind of like
saving up your first 100 thousand dollars the first hundred thousand
dollars is painful but once you have momentum on your side everything gets
easier now sadly despite using the depth model many people still struggle to buy
a home which is why in this next video i will go over the step-by-step approach i
took to buy my first home that i guarantee will streamline your path to
home ownership click over and let's get started