Question

Jenny wants to buy a house in 1 year with her man. She is a nurse and her man works at a market. In total they make about $6000 a month in wages. They want to have a baby together at the end of the year as well. She has about $10,000 saved but knows that isn't enough. Right now they pay $2000 a month for rent at their apartment but have also been offered a room at her mother's house. She owes about $1000 per month in school loans. They have car expenses equaling $800 a month. Their other expenses include eating out at $700, they spend $300 a month on coffee and other drinks, $400 a month on groceries, and $300 a month on clothes. Jenny realized she doesn't really need her man to buy her house, but needs a down payment quick. Usually you need about 20% of the loan but because she is a first time buyer she can get it at 5% down. The house she has her eye on is $600,000. What would you suggest Jenny do to save that $30,000 for her house by next year?

Answer 1

Answer: To save $30,000 for the house down payment within one year, Jenny needs to assess her expenses, find potential areas to cut back, and explore additional sources of income. Here's a suggested plan for Jenny to achieve her goal:

1. Assess Expenses:

- Rent: Since Jenny has the option to live at her mother's house, she can save $2000 per month on rent.

- School Loans: Allocate the necessary $1000 per month for loan payments.

- Car Expenses: Evaluate if there are ways to reduce car-related costs, such as carpooling or using public transportation, to potentially save on car expenses.

- Eating Out: Consider reducing the frequency of eating out and focus on home-cooked meals to save $700 per month.

- Coffee and Drinks: Minimize the expenses on coffee and other drinks to save $300 per month.

- Groceries: Opt for cost-effective meal planning and grocery shopping to reduce the grocery expenses to, for example, $300 per month.

- Clothes: Consider reducing non-essential clothing purchases and allocate $100 per month for clothes.

2. Create a Budget:

Based on the revised expenses, create a monthly budget that includes the essential expenses and sets aside a specific amount for savings towards the down payment. Allocate the remaining income towards other necessary expenses and savings.

3. Additional Sources of Income:

- Side Jobs: Explore opportunities for part-time jobs or side gigs to supplement the income. Jenny or her partner can consider taking on additional work, such as freelance gigs or odd jobs, to increase their monthly earnings.

- Selling Unneeded Items: Identify items that can be sold to generate additional income. This could include furniture, electronics, or other possessions that are no longer needed.

4. Reduce Non-Essential Expenses:

Identify and cut back on non-essential expenses that are not contributing significantly to Jenny's goals. This may include entertainment expenses, subscriptions, or other discretionary spending.

5. Increase Savings:

After revising the budget and reducing unnecessary expenses, allocate a specific amount each month towards savings for the down payment. Ensure that the savings are set aside and not used for any other purposes.

By implementing these steps, Jenny can work towards saving $30,000 within a year for her house down payment. It requires discipline, careful budgeting, and finding opportunities to increase income or reduce expenses.