Beating Broke

Personal Finance from the Broke Perspective

Making Your Way From Broke to First Time Homebuyer, Here’s How

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If you’re one of the many Americans counting down the days until you’re no longer “throwing money away” for rent, you’re not alone. Buying a home is the largest purchase the average person will make in their lifetime, which is why it’s essential to prepare for such a significant investment. If you’re ready to make your way from broke to a first-time homebuyer, keep reading.

 

Determine your budget

Before you begin dreaming of mini-mansions, you need to know how much house you can comfortably afford with your current income. The word “comfortably” is used purposely here because many real estate agents and mortgage lenders will show you homes at the upper end of your budget, which is great if you want to survive on rice and peanut butter each month. 

Use one of the many free mortgage calculators online to determine how much house you can afford with your monthly housing budget. Again, try to stay on the low side of that number to make sure you have enough money left over each month to save for unexpected home maintenance and repairs.

 

How’s your credit?

Quick — what’s your credit score? If you can’t answer right away, it’s time to run a credit report and find out where you stand. If your credit score is on the low side, now is the time to develop a strategy to raise your score to get you into a home by qualifying for a mortgage with a decent interest rate.

If you have overdue bills, begin working with collections agencies to pay off those outstanding balances and get the “dings” removed from your credit report. Specifically, ask the representative for the balance you need to “pay to delete” the debt collection from your credit report and get it in writing.

Many younger buyers struggle with low credit score simply because they haven’t amassed enough credit. Consider asking a parent to add you as a registered user on one of their cards to help you build credit; only do this if your parent has a solid credit score and history of on-time payments, or you could adversely affect your credit rating. You can also open a credit card with a small line of credit and use it each month to amass a history of revolving payments. Most of all, be patient, as building your credit takes time.

 

Save for your downpayment

If this is the first foray into your first time home buying education, you need to know that you don’t necessarily have to have twenty percent saved for a downpayment. When you use a mortgage calculator, you can also have it show you the amount you’ll need for a downpayment, but this amount will vary depending on your circumstances.

When you’re saving up for your first home, realize that your down payment percentages could be as high as 10 or 20 percent, or as low as 3.5 percent to zero down; it all depends on the type of loan you’re after. If you struggle to save, then a first time homebuyer or FHA loan may be the best option, only requiring 3.5 percent down to purchase. However, if you have no problem saving ten percent, a conventional loan may save you money in the long run. Talk with a mortgage lender to determine the types of loans you’re eligible for, and which one makes the most sense for your financial situation. Remember, this is the largest purchase you’ll make in your lifetime, so be sure to weigh all of your options.

 

Expect the unexpected

If you think everything’s smooth sailing once you sign the paperwork and move into your new home, you’re mistaken. There are several surprises you’ll encounter as a first time homebuyer, including taxes, homeowners association fees, insurance, and maintenance costs. Again, this is why you don’t want to max out your monthly housing budget with your mortgage payment, as things will invariably pop up.

It’s not uncommon for things to go wrong with your home shortly after purchasing, and you’ll quickly find out that even something as minor as having to have a plumber come out for a repair can be costly. So, just in case your furnace decides to quit, or your central air conditioning stops pushing cold air, you have funds set aside each month as a failsafe.

When you research your options, you’ll find that the road to homeownership is straighter than you’d originally imagined, and perhaps even a little shorter. Planning, patience, and persistence will take you from broke to first-time homebuyer.

5 Strategies to Make Food at Home If You Hate Cooking

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For some, cooking is a joy and a way to relax after a long, hard day. For others, cooking is a daily task that must be done to save money and fuel their bodies. And then for others, cooking is one of the worst tasks they have to do and one they avoid as much as possible by eating out, picking up food, or getting an invite to someone else’s house who is doing the cooking.

If you’re in the latter group of people, you’re not alone. However, if you utilize these five strategies to make food at home when you hate cooking, you’ll find that you’ll save a considerable amount of money on your food budget, and you’ll likely be eating better.

Pick “Dump” Meals

Sure, the name is unappetizing, but “dump” refers to meals where you just put the food in the InstaPot or slow cooker and walk away. One example might be a few chicken breasts, black beans, corn, and salsa. Cook in the slow cooker for a few hours, shred the chicken, and serve over rice.

Pinterest and YouTube have plenty of dump meals; you could make several and put some in your freezer, making dinner prep even easier.

Use Premade Food

Most stores have some type of pre-made food you can use. Down the freezer aisle, you’ll find pre-made meals for a family that you just have to put in your slow cooker or cook on the stove; all of the ingredients that you need are in the bag.

Likewise, you can buy already chopped vegetables from the salad bar and rotisserie chicken that’s already been pulled from the bone to make meal time prep faster.

Premade salad bar ingredients for people who hate to cook.

Order a Meal Kit Delivery Service

There are many meal kit delivery services available such as Blue Apron, Green Chef, and HelloFresh, to name a few, each with their own specialty. In your kit, you’ll receive all of the ingredients you need for the meals as well as a card that tells you how to make the meal. With a meal kit delivery service, you avoid the headache of grocery shopping and get to try a new meal.

Make a Few Meals in Advance on Sunday

Another option for those who hate cooking is to make a few meals on Sunday. Then, when you come home on Monday, you don’t have to cook at all. Simply pull out the meal you already made and reheat it. While you do still have to cook with this option, you only have to cook one day, and then you get several days off when you eat the meals you cooked on Sunday.

Pick Easy Meals

No one says you have to have fancy dinners. Scrambled eggs, toast, and fruit can do just fine and require minimal cooking and clean up.

Easy meals for people who don't like to cook.

If you hate cooking, don’t feel the need to resort to eating out every night. Instead, try one of these five strategies to make food at home when you hate cooking.

If you hate cooking, what strategies do you use to still eat at home but limit the amount of time you have to cook?

Would You Pay $25 a Pound for Vegetables?

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My husband and I have been trying to garden for a year now.  I say trying because we recently relocated to Tucson, Arizona, and gardening here has a STEEP learning curve.  However, it’s something we both enjoy, so we’ve kept at it, and we’re finally starting to see some rewards. Due to our gardening failures while learning to garden in a new climate, we’re currently paying about $25 a pound for vegetables, but I’m okay with that because I know this hobby will likely pay for itself eventually.

Those Gardening Expenses

Vegetables for $25 a pound?
$25 a pound for Vegetables?

Starting our garden has not been cheap.  We had to create three garden beds, which included the dirt, the pavers for the sides (they’re slightly raised garden beds), and the soil amendment.

We planted in October when the temperatures finally dropped into the 80s, but we planted the wrong vegetables for the season, and we planted in a shady spot when we should have planted in full sun.

All we ended up with last winter was one kale, one Swiss chard, and two lettuce plants.

In the spring, we planted tomatoes that were just starting to blossom when the summer hit with 100+ degree days and scorching sun.  We covered the tomato plants with a homemade sun shade, but we only got 6 cherry tomatoes.  All summer long they didn’t even flower.

Next, we amended the soil further and planted watermelon and cantaloupe starts.  Every time a baby watermelon developed, one of the many birds in our yard ate it.  This continued until September when the birds finally went away.  Since then, we’ve gotten 4 watermelons.

Now, it’s fall, and we are finally getting some produce.  We have baby bok choy that are growing strong, 4 Swiss chard plants, and 8 green pepper plants that have more than 20 peppers on them in various states of growth.

Hopefully our costs will drop or moderate as we learn more about how to garden in the desert.  However, so far, we’ve easily spent $200 for the few veggies we’ve been able to harvest.

Sticking It Out Through the Learning Curve

For someone like me who doesn’t like to spend money frivolously, these gardening expenses bother me.  But there are two reasons we keep trying to garden:

My husband really enjoys it.  I think my husband has discovered his inner farmer.  He loves spending weekends outdoors, puttering in the garden.  Every evening, he comes home from work and waters and takes care of the garden.  It’s a great hobby for him.

The costs should equalize–eventually.  As we learn more about gardening here, we should be able to produce more vegetables.  We won’t have to create the raised beds again.  Our only expenses going forward will be soil amendment each season (so necessary with our desert soil), seeds, and water.  The longer we garden, the lower our costs should be.

Even though it doesn’t feel like it now, gardening will eventually be a hobby that at least costs us only a small amount out of pocket or that pays for itself.

Do you garden?  How steep was your learning curve?  Do you find that the garden pays for itself eventually?