Embrace frugal living and save money for a down payment with these simple tips.
Are you addicted to the finer things? Love to splurge on little indulgences throughout the week? While these may seem like small, harmless expenses, the truth is, they add up—and they may be preventing you from affording a home. But wait, there’s good news. Better spending habits are possible! And although frugal living is a sacrifice, the reward could be a home you can call your own. We’ve come up with a list of 15 spending habits for you to consider putting an end to in the name of homeownership.
Tips for Frugal Living
1. Daily coffee run
Let’s get right to the point. We love coffee. In fact, Americans consume 400 million cups of coffee per day! The average 16-ounce latte at Starbucks is $3.65, straight up, no additional fees for syrup or special milk. Trust us, we love a good latte too, but that daily coffee run is costing you $25.55 per week, adding up to a hefty $1,328.60 a year! Maybe it’s time you tried brewing at home.
Generally speaking, if you smoke a pack daily, you’re spending about $6.00 a day. The national average price of a pack of cigarettes is $8.00, and that doesn’t account for the tax that varies by state (New Yorkers pay roughly $10.50 for a pack because of their cigarette tax!). If you smoke a pack a day (and you don’t buy your cigarettes in New York City) this habit’s costing you about $43.12 a week and a whopping $2,242.24 a year! Think about how fast you could afford a down payment on a home if you quit! Talk about motivation.
3. Daily lottery ticket
It’s only a dollar a day, but at the end of the year, you’re out $365 that could’ve easily gone toward a better prize: your own home.
4. Fast food five times a week
Today, a Big Mac meal costs $5.99. If that’s your go-to lunch every day during the work week, it’s costing you $29.95. Do this all year and you’ll rack up a steep fast food bill of $1,557.40! Do you know what this means? If you ended this spending habit and, instead, put that $1,557.40 in savings, in about five and a half years, you’d have enough money for a 5% down payment on a $175,000 home price tag. Yeah, that just happened.
Isn’t it nice when someone else cooks for you? We love a good restaurant meal. But if you’re dining for two and factoring in soft drinks, this could cost anywhere from $25 to $35 at a medium-priced restaurant chain. (We’re not even counting dessert or adult beverages.) Don’t forget the tip! If you’re tipping a generous 20%, that $35 meal for two just became a $42 bill. Need we inform you that cooking a similar meal at home will typically cost you less than half the price?
6. Friday and Saturday night at the bar
Let’s say you’re a social butterfly and you like going to the bar on Fridays and Saturdays. We get it. It’s the weekend. You worked hard all week and now you want to go out and unwind with your friends. Well, it’s time to count the cost. Depending on where you go, a mixed drink could cost anywhere from $9 to $15 and a beer might be $5 to $8. Then, you’ll also want to factor in how many libations you enjoy per night. We’ll take the averages and say you buy four drinks each night—that equals about $35 a night, not including tip. A nice 15% tip puts you at $40.25 a night, $80.50 a weekend, and a devastating $4,186 a year! We haven’t even talked about cab rides and late night munchies! How’s that for a sobering reality?
7. Convenience store snacks
Ah, those pesky gas station cravings. Convenient for your stomach, not so convenient for your down payment savings. A bag of chips here, a bottled beverage there. . . Throw in a bag of candy too and you’re spending $5 to $10 every time. Do this three times a week for one year and you just spent anywhere from $780 to $1,560!
8. Thursday night movies
It seems movie ticket prices are only going up these days. If you’re a big fan of the big screen movie experience, you might be surprised to learn it’s costing you big bucks. It’s been reported that the average cost of going to the movies in North America reached $9.37 last year, but for some, we’ve seen movie ticket prices upwards of $15 for one person! Factor in popcorn and a drink and your harmless trip to the movies just cost you $25. And, if this is your Thursday night ritual for one year, you’ll have spent roughly $1,300 by the end of it. (Perhaps, if you saved that for a down payment, you could be watching movies in bed in your very own home.)
9. Bi-weekly mani/pedi
At small nail shops, a simple manicure alone may cost you $10–$15. Throw in a pedicure and your bi-weekly mani-pedi cost might be as much as $40 at a small shop, not including tip. Remember, we’re low-balling it, and even then, this expense could add up to $480 at the end of the year! If you saved that money, you’d be able to put a decent dent in your closing costs on a mortgage.
10. Bottled water
Frugal living starts at home. Buying bottled water at the grocery store may seem convenient (and we know you love the taste better than tap water) but do the math and it could be costing you upwards of $250 a year! Of course, the exact cost will vary based on brand name, quantity, and consumption, but you get the picture. Consider alternatives like installing a filtration system, buying a sink faucet attachment, or getting a water-filtering pitcher. These all might cost more upfront, but long-term, they’re investments that are actually saving you money (money that can go toward a home!).
11. Car washes
The cost to get your car washed twice a month is estimated at $12.68 a month, if washed by hand, and a tunnel or conveyor car wash is averaged at $15 per visit—$30 if you go twice a month. That’s anywhere from $152.16 to $360 a year! Frugal living would not approve.
12. Extra smartphone data
Go over on your data? Avoid buying more. If you truly want to try frugal living and save money to buy a house, step away from the smartphone or be diligent about finding WiFi territory. Making small sacrifices now will help you buy a home later.
13. Gym membership
If buying a gym membership is the motivation you need to work out, you may want to try getting motivated in some other way. On the cheap end, a gym membership costs $50 per month—and that’s not even including an initiation fee! That’s burning a $700 hole in your wallet the first year when you could be lifting free weights at home or going for a run around the neighborhood for free.
14. Music subscriptions
Who doesn’t love listening to music without commercials? We totally get it. But $9.99 a month is costing you $119.88 to listen to music ad-free. How will you practice frugal living and save for a down payment on a house with a yearly bill like that?!
15. TV subscriptions
Be honest, do you really need Netflix, Hulu, Sling, and Xfinity cable? A TV-lover who’s subscribed to the cheapest offering for all four is still spending roughly $88.97 a month—a massive $1,067.64 every year! Can you limit that to one or two? Or, switch between streaming services monthly? Frugal living isn’t easy, but when you’re working toward a greater goal, it can be so worth it.
Ready to see how much you might need to save for a down payment? Get those frugal living skills ready and get a free, no-obligation home loan estimate today.