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Down Payment Money Saving Blog Archives - November 2007

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November 25, 2007
New Article: 10 Easy Frugal Ways To Save $1,088 Per Year Toward Your Down Payment

I'm always focusing on large ways to save money because they have the most impact. A down payment is a very large savings goal and often requires big savings tactics. This does not mean the little things don't matter. In fact, the little things are great because they take up minimal or even no extra time thus giving you great leverage over your time spent on saving money. Learn how I'm saving $1,088 per year with not much effort at all.

November 25, 2007
The Two Cent Penny and What It Means To Your Down Payment Savings Plan

Over the last several years, metals have been on a rally versus the US dollar. With gold hitting new highs, the weakening dollar is making the financial headlines daily. A very striking and less known fact is the value of the pre-1982 copper penny topping 2 cents (a neat resource to see the metal melt value of coins is COINflation.com). Pennies made before 1982 (and some produced during 1982 also) have 95 percent copper value whereas post-1982 pennies (and some produced during 1982) are composed of mostly zinc. The metal value of the pre-1982 copper penny is worth more than the face value, a clear indication of the US dollar inflating. Over time, I expect to see fewer pre-1982 copper pennies in circulation as individuals start hoarding them as they did with silver coinage of the past (I'm personally saving all of my pre-1982 pennies for good luck.)

What does this mean for us money savers? It means we need to be careful about how we store our hard earned savings. Leaving money in a savings account yielding 0.5 percent is a risky proposition because inflation will outpace the interest and erode your account's value over time. This is especially important when saving for a home loan down payment because a down payment is a longer term goal that may take 3-5 years to accomplish. In 3-5 years, the inflation effect can take a bite out of your hard earned savings.

So how can savers combat inflation? The ultimate way to combat inflation is to own your own house because real estate is a great hedge against inflation. This is one of the primary reasons I am saving for my down payment, in addition to living a more luxurious lifestyle offered by owning a place versus renting. During my current saving phase, I'm fighting inflation by investing in an FDIC insured high yield savings account that greatly beats the 0.5 percent offered by most regular savings accounts. The two top high yield savings accounts are Emigrant Direct and ING Direct. Additionally, I am cautiously hedging my bets by investing a conservative amount in oil stocks and also gold. Once I own my own house, I will continue to invest my savings in stocks, one of the best long term investments and hedges against inflation. My ultimate picture of financial freedom involves my own home and a diversified portfolio of domestic and international stocks, with only a six month supply of cash in a high yield savings account as an emergency fund.

November 19, 2007
Accelerate Your Savings By Getting A Raise

One of the best ways to save more money for your home loan down payment is to earn more money. There are many ways to earn more money that I have championed on this site such as starting a website on your spare time to earn advertising revenue, getting a second job on the weekend, and selling your extra things to make income on the side. Today's topic is another way and perhaps the greatest way to accelerate your income: Getting a raise at your job.

There are several reasons your job is important if you are in the market for your first house. First, your job is the primary stream of income that will be evaluated for mortgage qualification. Second, your job income stream has the most leverage out of any income stream. As your largest source of income, you have the most upside as you get promotions and raises. For these reasons, it's of prime importance that you do a great job at work and work towards getting promotions and raises. These days it's not always easy to get a raise because employers are trying to squeeze out as much value as possible from every employee. The less they pay employees, the greater the profit margins for the shareholders. At the same time, employers have a vested interest in retaining their top employees because it is a long term investment in their organization. With some very hard work and a little bit of help on negotiation skills, you will be able to consistently earn raises at work to supplement your savings goals.

To go into this subject in much more detail, I'm pleased to announce that we have a guest article on our site all about the art of negotiating a raise at your job thanks to SavingAdvice.com. Once you have achieved a raise, each additional dollar you make should go to your down payment savings fund. Before you know it, your raise will probably be one of the biggest driving forces in your savings plan. Moreover, your raise will help you qualify for your home loan because lenders love to see a high salary.

November 12, 2007
Leverage Like Minded Friends To Save Money

Saving money is a function of dedication and personal will. It's about saying no to the movies in favor of a free walk or going to a free company sponsored lunch instead of taking it easy with your friends at lunch. It's not always easy to stay dedicated. It gets even more difficult when saving for a home loan down payment because you must save a very large amount of money which could take years. Remaining a dedicated and diligent saver for years and years is no easy task. There are two ways to make it a little easier:

  1. The first is to give yourself some slack. It's ok to break the rules and I advocate breaking rules. I went out to an expensive dinner with my girlfriend this weekend and spent a lot of money but we had an absolute blast. I will now be happy this week at work knowing I had a great weekend and also will be motivated to take it easy at lunch and either pack my own lunch or even better eat free food at my office. If you periodically reward yourself, it will be much easier to save money for your down payment over the long haul and stay dedicated as a way of life.
  2. The second way I advocate staying dedicated is to not approach saving by yourself. Surround yourself with like minded friends who are also interested in saving money. Share in each other's enthusiasm for saving. Collaborate on ways to have fun while not spending money. You will find that having positive influences around will make your money saving much smoother. If you don't have friends who are interested in saving money, I suggest surveying frugality blogs on the Internet. There are a ton of great frugal blogs out there and you can surround yourself by like minded savers by participating in the Internet community and adding comments. Become an active community member and it will be a breeze to stay focused in your quest to save money.

November 5, 2007
The Company Retreat - Saving Money and Advancing Your Career

One of my favorite ways of saving money is leveraging my office for free stuff. One example of this is saving money at lunch by eating free food my office provides. Another example I am really excited about is the company retreat. I just got back from a week long company retreat. The trip was great because all expenses were provided including food and my hotel room. It was a week of pure savings because I got paid my normal salary but at the same time had no food expenses. My estimated savings is at least $100, not bad for a week. While it's often difficult to break up your routine, I urge you to embrace the company trip because it provides an opportunity to save some serious money, in addition to meeting new people who you might not normally work with and advancing your career. A great way to save more money is to get a promotion at work and earn more money. Company retreats are an ideal place to make yourself known as a leader and team player, helping you get that promotion.

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