i have an average paying Job that pays me just enough to pay my bills. i have no savings and live on credit card most of the time. i really desire to be an entrepreneur to enable me have more time but i can not at the moment because i am working towards buying a house but by my calculations, it will take me about 3 and a half years to be able to come up with a 20% down payment. i don't want to pay insurance premiums and incur more bills but it looks like that may be my only option. i still have some outstanding debts i am trying to clear off which might take me another year or so. What would you do in this situation. i desire to move into my new home in less than 2 years.
Lawrence
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Hey Lawrence
Congratulations on having a well laid out plan. Many people do not even have a plan.
if i were in your situation, the first thing would be to try and increase that income by getting another job or starting a business on the side. Becoming an entrepreneur just to have more time might not really be feasible because running a business takes a lot of your time. most especially at the initial stage. You will not on a 9-5 schedule though but you will be on a schedule 24 hours until you are able to structure your business, make sales etc. however i think you should start something on the side till you are able to stand enough to quit and go full time. Take the risk, it may work out sooner than you plan and it may bring you more income to enable you buy your house within a shorter time frame.
I do not know how much your new home will cost so its hard to help you work out the math. if it takes you 3 years to save up your down payment then that is what i would do. Buying a home at a lesser percentage incurs insurance premium payment in most situation till you get back up to the 20% payment. That is an unnecessary cost that you do not need. you could rent a little while longer till you get your savings up to 20%. Most people who put less than 20% down payment end up paying for their homes twice when you add up all the extra payments that you could have saved.
Second, i would focus on clearing out all the outstanding debts so that i don't have too many bill reminders coming in the mail all at the same time. It can be frustrating. I will save all i can possibly save. There is no need for a major vacation right now.
Third, I would look for how to increase my income by finding another job. So for example if i am looking for $50,000 as my down payment , i would divide it by the number of months i have left before my desired move in date. Let us take May 2019 as our desired move in date chichis 2 years from today, that comes up to about $2083 each month and i will look for a job that will make my salary increase by that figure so that i can immediately save the extra for the down payment without having to change my life style. Using this calculation, if you desire to move in sooner, all you will have to do is pick a date that you desire and divide the down payment by that, that way you know how much increase in pay you are searching for and you can get the necessary skills needed to be able to land that type of job offer.
Hope i made some sense.
Thank you so much for writing
Regards
Adey
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