how on earth can we save a down payment?

[Anonymous]

13:56's advice on car buying is terrible. Buying a car based upon monthly car payment is the worst way to buy a car. Negotiate price, interest rate and then choose a term that gives you the monthly payment you want.

[Anonymous]

Zero down

[Anonymous]

NP here. DH and I saved about $100K for a DP while we had DC1. Took us about 7 years (I think it could take you less depending on your HHI).

What you should do:

- rent someplace MUCH cheaper. We lived in a 1BD garden-style walkup for 7 years because it was so cheap. Close to metro, but no amenities. About $1200/month when we moved out two years ago. In N Arlington, so a good neighborhood. You don't need a whole house.

- One car or no car if possible (we did no car until we had the baby, but we bought that car with cash).

- Drop cable COMPLETELY. You can watch stuff for free on Hulu. Get DVDs from the library. This is a SERIOUS waste of $1500 per year, OP!

- Cheaper cell phone plans.

- Cheaper groceries. Make lists, have a budget. I feed my family of 5 (three adults and 2 kids) on about $100/week. Buy less meat, don't buy premade or prepackaged.

- Try to find a less expensive childcare solution. We have an au pair and it's only about $1500/month (and both au pairs we've had were fabulous, PLUS you don't need to hire a babysitter because you can ask them to cover some evenings/weekends if it works with your schedule and their hours, so additional savings there).

- Pay off your CC and stop spending money you don't have

We only made $60K (combined) when we started saving up for DP, ended up with HHI of about $150K before we bought. Got a modest $550K home in N Arlington.

You have to make some big changes, but you can do it. You could save $25K per year if you follow all the advice above. Not saying you have to follow all of it, but you could potentially have a huge DP in 4 years if you tighten your belts significantly now. That's what we did.

[Anonymous]

Anonymous wrote:Yes. We lived VERY simply for about three years. We did NOT eat out. We brought lunch to work. DH had previous construction experience and in the sprng and summer worked construction on weekends. I picked up extra work for the holiday season.

We lived in a studio. We did not go to the movies, we did not travel, we did not have cable, we did not have smart phones, when relatives wanted to give us gifts for holidays or occasions we asked for gift cards to Trader Joes or Netflix months or giftcards to Old Navy for DD or Target. We REALLY scrimped. We went to people's homes minimally because reciprocating was beyond difficult at our house.

We kept going because seeing our savings grow and grow spurred us forward. It was hard, but "suffering" (in our first world way) was totally worth it and I think it's in the category of having made us a stronger couple since it didn't kill us.

I really admire you. Way to not whine, buckle down and make it happen for your family. Wish I knew more people like you in real life

[Anonymous]

Anonymous wrote:NP here. DH and I saved about $100K for a DP while we had DC1. Took us about 7 years (I think it could take you less depending on your HHI).

What you should do:

- rent someplace MUCH cheaper. We lived in a 1BD garden-style walkup for 7 years because it was so cheap. Close to metro, but no amenities. About $1200/month when we moved out two years ago. In N Arlington, so a good neighborhood. You don't need a whole house.

- One car or no car if possible (we did no car until we had the baby, but we bought that car with cash).

- Drop cable COMPLETELY. You can watch stuff for free on Hulu. Get DVDs from the library. This is a SERIOUS waste of $1500 per year, OP!

- Cheaper cell phone plans.

- Cheaper groceries. Make lists, have a budget. I feed my family of 5 (three adults and 2 kids) on about $100/week. Buy less meat, don't buy premade or prepackaged.

- Try to find a less expensive childcare solution. We have an au pair and it's only about $1500/month (and both au pairs we've had were fabulous, PLUS you don't need to hire a babysitter because you can ask them to cover some evenings/weekends if it works with your schedule and their hours, so additional savings there).

- Pay off your CC and stop spending money you don't have

We only made $60K (combined) when we started saving up for DP, ended up with HHI of about $150K before we bought. Got a modest $550K home in N Arlington.

You have to make some big changes, but you can do it. You could save $25K per year if you follow all the advice above. Not saying you have to follow all of it, but you could potentially have a huge DP in 4 years if you tighten your belts significantly now. That's what we did.

Good ideas, except maybe the ones about getting a smaller place and an au pair are mutually exclusive.

[Anonymous]

Anonymous wrote:NP here. DH and I saved about $100K for a DP while we had DC1. Took us about 7 years (I think it could take you less depending on your HHI).

What you should do:

- rent someplace MUCH cheaper. We lived in a 1BD garden-style walkup for 7 years because it was so cheap. Close to metro, but no amenities. About $1200/month when we moved out two years ago. In N Arlington, so a good neighborhood. You don't need a whole house.

- One car or no car if possible (we did no car until we had the baby, but we bought that car with cash).

- Drop cable COMPLETELY. You can watch stuff for free on Hulu. Get DVDs from the library. This is a SERIOUS waste of $1500 per year, OP!

- Cheaper cell phone plans.

- Cheaper groceries. Make lists, have a budget. I feed my family of 5 (three adults and 2 kids) on about $100/week. Buy less meat, don't buy premade or prepackaged.

- Try to find a less expensive childcare solution. We have an au pair and it's only about $1500/month (and both au pairs we've had were fabulous, PLUS you don't need to hire a babysitter because you can ask them to cover some evenings/weekends if it works with your schedule and their hours, so additional savings there).

- Pay off your CC and stop spending money you don't have

We only made $60K (combined) when we started saving up for DP, ended up with HHI of about $150K before we bought. Got a modest $550K home in N Arlington.

You have to make some big changes, but you can do it. You could save $25K per year if you follow all the advice above. Not saying you have to follow all of it, but you could potentially have a huge DP in 4 years if you tighten your belts significantly now. That's what we did.

We also saved money by living somewhere MUCH cheaper via living in Baltimore and commuting to DC by Marc train each month.
We were able to save roughly $200K this way over 7 years whereas had we lived in DC we would have put this all into housing and the associated increased costs of living in DC.
Then we put the $250K into a NW DC house. Without our years of saving via commuting from afar we would have never been able to buy in upper NW.

[Anonymous]

For those who are saying, hey, we did it, this is how sacrificed for several years in order to come up with the money--- I ask you. When was this? Was it at the top of the market as it is now? I'm guessing it was either pre-bubble or post-bubble. Not now. Keep in mind everyone that the second you buy the house, you are already out 6% of the value because of the cost of the realtor fee when selling. This is the top of the market here. So not only if you do scrimp and save for a couple years to come up with the downpayment, you still 1) have to compete with the offers who look much better on paper than yours well and 2) are buying at the top of the market.

I just marvel at how many people are buying near million dollar townhomes in Potomac Yard right now. How much do you really think those can appreciate? I don't care if a metro stop is coming. My point is that I am just dumbfounded that people are continuing to buy houses at all in this area. People make great salaries here but then dump it all into their housing. Meanwhile people in much lower COL areas are living better than we are.

[Anonymous]

Anonymous wrote:For those who are saying, hey, we did it, this is how sacrificed for several years in order to come up with the money--- I ask you. When was this? Was it at the top of the market as it is now? I'm guessing it was either pre-bubble or post-bubble. Not now. Keep in mind everyone that the second you buy the house, you are already out 6% of the value because of the cost of the realtor fee when selling. This is the top of the market here. So not only if you do scrimp and save for a couple years to come up with the downpayment, you still 1) have to compete with the offers who look much better on paper than yours well and 2) are buying at the top of the market.

PP here. We closed on our house ($620K, bought with six years of savings) one month ago.

Now, we did get lucky with the purchase in one significant way: we put a contract on it before it officially went on the market. I'm not sure we could have gotten a comparable house otherwise. But we did actively look for a solid two years before buying, losing a few houses along the way, and the house we bought has a lot of great qualities but is by no means perfect, so it's not as if we hit some kind of magical jackpot.

[Anonymous]

Anonymous wrote:For those who are saying, hey, we did it, this is how sacrificed for several years in order to come up with the money--- I ask you. When was this? Was it at the top of the market as it is now? I'm guessing it was either pre-bubble or post-bubble. Not now. Keep in mind everyone that the second you buy the house, you are already out 6% of the value because of the cost of the realtor fee when selling. This is the top of the market here. So not only if you do scrimp and save for a couple years to come up with the downpayment, you still 1) have to compete with the offers who look much better on paper than yours well and 2) are buying at the top of the market.

I just marvel at how many people are buying near million dollar townhomes in Potomac Yard right now. How much do you really think those can appreciate? I don't care if a metro stop is coming. My point is that I am just dumbfounded that people are continuing to buy houses at all in this area. People make great salaries here but then dump it all into their housing. Meanwhile people in much lower COL areas are living better than we are.

Fair enough. I bought two years ago. I don't think that was a tremendously different era. Not only that, but two years ago, you basically HAD to have a 20% DP, now it's loosening up again (making it possible for people without a big DP to at least get a mortgage).

[Anonymous]

Anonymous wrote:Hmm, all the talk of not having children until later and saving like crazy from early on is irrelevant to OP. She cannot undo it nor change some other stuff that's already done (cc debts, income tax repayments).
So, from what I see - only place OP can really shave things off - cable and phone. The rest is hard to change now.
OP, stick to the budget and just hang in here: childcare costs are not forever, it will end soon, so do your debt repayments (hopefully); you'll have a bit more cash on hand to save for down payment (and you can only have 5% to start with). Good luck!

It may be irrelevant to OP's situation, but it's relevant to the question.

OP asked:

Is there anyone with children, that works full time, that bought a home in this area without employer or family support, that didn't leverage previously owned property, or can into some unexpected money?

And my answer was yes. We scrimped and saved and had kids later. That's how people do it. If you didn't, fine, but don't gripe about "everyone else having family money" because that wasn't the case for many of us.

[Anonymous]

All of this scrimping and ridiculousness for a building to lay your head? Jeez. I'm happy to be renting.

[Anonymous]

Anonymous wrote:Cutting out cable and eating out is pretty much the answer to all life's monetary obstacles and the cornerstone of DCUM financial advice. That's pure gold right there, PP.

+100

[Anonymous]

Anonymous wrote:Making drastic changes in lifestyle to buy a home is a difficult adjustment to make. But it can be done. My next door neighbors were "boat people" who all pooled their resources, lived with relatives, worked 80+ hours a week and in a year paid cash for their first home in Annandale. Now they all have their own homes (never borrowed for any of them).
Part of the problem in American culture is the shaming that goes on when someone lives in a group home, or in their parent's basement, driving a crappy car, etc.

the only shaming i see here are of those who drive luxury cars.
also, americans are much more mobile than people, and few employed people live close enough to their parents or relatives to be able to live together.
from your account it still sounds like "boat people" bought their real estate way before bubble.

OP,

to answer your question, we saved for downpayment because we lived in low COL for several years previously, without kids. however, we didn't put anywhere close to all our savings into the downpayment. we bought in baltimore, and are paying off our 15 year mortgage comfortably while living in a very beautiful place. the commute for us works much better, too. if this could work at all for you, i recommend you consider it.

[Anonymous]

Anonymous wrote:Sorry, it's hard. We saved significantly before we had kids and we bought the house that we wanted to raise kids in. It would have been much harder to save enough after kids. But this is part of why we didn't have kids until 9 years after we got married.

But some good ideas. I work a full-time job, but I have a second job that I work weekly that gives me about $3000 per year. Before kids, that money went to the house fund. Now, after kids, some of that money goes to a splurge of a monthly housecleaning service that helps keep us from being completely exhausted and the rest goes into a fund for when our 9 year old car dies (I'm hoping it will make it to 15 years, and it seems to be in great shape now, so possible). Picking up a part-time job, even if only seasonal is a good idea to help create a house fund.

That's great, but that's 9 years you lose with your kids. 9 years you lose with your future grandchildren. Waiting to have kids is a pretty big sacrifice for a material object. I personally don't think it's worth it.

[Anonymous]

Anonymous wrote:

Anonymous wrote:Sorry, it's hard. We saved significantly before we had kids and we bought the house that we wanted to raise kids in. It would have been much harder to save enough after kids. But this is part of why we didn't have kids until 9 years after we got married.

But some good ideas. I work a full-time job, but I have a second job that I work weekly that gives me about $3000 per year. Before kids, that money went to the house fund. Now, after kids, some of that money goes to a splurge of a monthly housecleaning service that helps keep us from being completely exhausted and the rest goes into a fund for when our 9 year old car dies (I'm hoping it will make it to 15 years, and it seems to be in great shape now, so possible). Picking up a part-time job, even if only seasonal is a good idea to help create a house fund.

That's great, but that's 9 years you lose with your kids. 9 years you lose with your future grandchildren. Waiting to have kids is a pretty big sacrifice for a material object. I personally don't think it's worth it.

It's also pretty risky. Having children later has health risks for both the mother and the baby/child. As well as infertility issues.

Physically, it's not the best plan.