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Tips on Buying a House

Home AdultingTips on Buying a House
Tips on Buying a House

Tips on Buying a House

May 21, 2017 Posted by Tim Kim Adulting, Real Estate 100 Comments

Buying a home. Now, I want to start by saying that I’m not going to touch on whether or not buying or renting is the right choice for you. Both have some solid pros and cons, and so everyone’s situation will be different. I’ll visit the pros and cons on a future post. Today, I want to share some of the things my wife and I did, in preparing to buy our first home.

Related: Why You Should Buy a House

#1. Make it a goal, not a dream. Now you  might be thinking, that’s super cliche. Yeah it is. But it’s important that I point this out because they’re not the same thing. A goal has concrete steps. A step-by-step action plan to realize the goal. Dreams without goals are just wishes. So you need to have a goal. For my wife and me, we started with an 8 year action plan to reach our goal, but it ended up taking 5 because some things went better than expected along the way.

#2. If you have a significant other, get on the same page. This’ll mean an honest sit-down. Before doing anything, there needs to be an agreement, a mutual agreement to set an actionable goal of owning a home. What this doesn’t mean is just sitting and day-dreaming together. It means going a step further by agreeing that you’ll create an actionable plan you can execute. and both of you will stick to, until you reach the goal. If you don’t have a significant other. Then you have it way easier, because you’re the only one stopping you. No one’s affecting you. You have complete freedom to decide you’re going to make it an actionable goal.

#3. This ties in with #2. If you’re a couple, there needs to be some compromise. For the spender, it’ll mean spending your money on the things you value most; you have to be selective. you can’t spend everything you’re making, and you have to be realistic; not actively saving consistently towards a goal like buying a house, is not a realistic goal. It won’t just some day happen. So what this means is you can’t spend all your monthly household income on consumption items and at the same time increasing your monthly fixed expenses (i.e. leasing an expensive car). For the frugal, you’re already frugal, so it’ll mean continuing to be frugal; but for it to be a realistic plan, you have to have some compromises with your significant other. Now, this might mean it’ll take you longer to reach your goal; since the more compromises you have the less you’re going to save, but it’s more important that it’s a realistic goal that both can mutually agree upon.

#4. The numbers have to work out. I know I know. This sounds like a no-brainer, but it needs to be said. Look at what your take home pay is, and look at where your money is going. If you living pay check to pay check, you absolutely need to work up a budget to see exactly what’s coming in and what’s going out. Because you need to know a literal end point (which is the amount you’ll need, for example a 20% down payment – an actual dollar figure, if you’re living here in the US). And how much you’re going to save per month. Note that I didn’t say how much you’re “able to save” per month. I’m talking about how “how much you’re going to save per month. It needs to be a literal amount. Knowing this will tell you exactly how long it’ll take you to arrive at your destination. Again, make sure you’re not fudging the numbers here.  You need to know exactly how much you can afford to save per month, which will translate to how long it’ll take. You may want to have some potential revision versions ready that might project any potential changes in your income. For example getting a raise every year and how that’ll affect your time horizon. Of if you’re current car is getting old and so there might be a potential need to finance a car purchase within the next year or two, that will increase your fixed monthly expenses for 3-6 years. which will significantly change your timeline saving for the house.

#5. If you did an honest assessment right now and the math tells you that it’ll take you 10 years to get there. That’s your literal timeline to completion (as of now – with no additional changes). But keep in mind, you can expedite this by doing a host of things. You can cut expenses, in order to save more. That’ll shorten the time frame. Or you can generate more income to get you there faster. Or do both. In today’s gig economy there’s a ton of things you can do to generate additional side income. For me and my wife, we made a decision to save more money by continuing to rent a single room in a house rather than getting our own apartment. To this day, I know of no other couple (personally) that rented out a single room rather than getting their own apartment once they got married. But we purposefully made this decision early on because we had a goal. And so, renting a room rather than getting our own apartment allowed us to easily double what we were saving at the time. Keep in mind, we could’ve still done it without being so spartan, but we purposefully did it to shorten the time horizon. We ended up staying there 3 years. A total of 6 years for me, because I lived there even before I was married.

#6. If your time horizon is long. you might want to consider putting your money into something that yields something more than what a CD or savings account. For us, it was the stock market. Keep in mind though that the stock market can be volatile. And so even if you aren’t stock picking, and you buy the entire market using some sort of total stock market mutual fund, index fund, or ETF of some sort, you can lose money for a while, before it comes back up. Of if you’re stock picking, you can lose everything. So just keep that in mind. There’s risk there. But for us, we allocated our savings into different buckets. For example, I allocated a certain amount towards my 401K and personal Roth IRA which is for me to get to my goal of financial independence. And a certain amount was allocated to a taxable account (this is just a normal non-tax-sheltered account) to save for a down payment on a house. I suggest having different accounts or different buckets, so that you can keep yourself honest and working towards very specific goals. Again for me, I had two different goals that I was working towards. One was a house, and one was retirement. I didn’t mix the two. And one was in a taxable account, where I can sell the stocks and pay capital gains tax, and one was done in a tax-sheltered account which I wouldn’t be touching for many decades until retirement (or personally for me, I call it financial independence – maybe I’ll do another post touching on that at a future date). And again, in my personal situation, my timeline was 8 years. but it was shortened to 5 years because one of the primary drivers was the stock market growth between 2009 and 2013. My home down payment bucket benefited quite a bit during that time period, so it helped to expedite us in reaching our goal for a down payment.

#7. Save ALL windfalls. Most people define windfalls as only things that happen very rarely or once in a lifetime. Like winning a lottery, or an inheritance. But I’m talking about things that are more common. Things like your annual tax return refund from the IRS. Or quarterly or annual bonuses at your work. Or any big side projects that you land, that you didn’t anticipate. Those are kind of like windfalls too. because it wasn’t forecasted in your plan. So anything like this where it’s bonus money, you need to bank as much of it as possible so that it’ll expedite your timeline for you to reach your goal. For me, I saved all my quarterly and annual performance bonuses, along with income from my side gigs, so that I could reach my two goals faster.

#8. Lastly, borrowing money from relatives. Personally, and this is my opinion. I think borrowing money from family should be limited as much as possible. And here’s why I say that. If you can’t afford something using your own ability, the chances are, it’ll be hard to maintain unless you continue to receive help going forward. Note that I said “chances are”, it might not be that case with you. If you’re already a hard worker and make enough money, but could use the help to expedite your situation, then yeah I can see it not having any harmful effects. But overall I’m a little old school like that. It happens with any type of wind fall. Small and big. Research shows, even on a bigger scale, like lottery winnings. Most people lose all of it fairly shortly; because it’s not self-generated. Now this isn’t exactly the same thing, but it has similar concepts. I’ve also heard of horror stories where parents buy their children homes, and the kids couldn’t even afford the property tax and HOA fees with their own incomes. That’s not a good long-term strategy. I read a quote somewhere, “You can’t reap what you haven’t sown.”

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About Tim Kim

Timothy S. Kim is an entrepreneur, blogger, investor, social media consultant and influencer, and author that has been featured on CNBC, Business Insider, HuffPost, MSN Money, Yahoo Finance, and many other national media outlets, publications, and dozens of radio stations nationwide. He comes from humble beginnings as a missionary/pastor's kid. He was born in South Korea but lived most of his life growing up in post-communist Hungary since 1991 due to his parents’ missions work there feeding the homeless, working with under-privileged children, visiting prisons, and serving in gypsie slums as Christian missionaries, which they still do to this day. He is a “self-made millionaire” but strongly believes he’s more “God-made” than “self-made” because of the blessings that has allowed him to immigrate to the USA in 2004 to build a future for himself and his now budding family. He currently lives in Southern California with his wife, son, and Max their loyal and friendly Argentine Mastiff.

    100 Comments

    Leave your reply.
    • Tyler
      · Reply

      May 21, 2017 at 4:46 PM

      Great post … you are the 2nd person I know crazy enough to rent out a room in someone else’s home after getting married !!! Looking forward to future posts.

      • Tim Kim
        · Reply

        Author
        May 22, 2017 at 12:35 AM

        Thanks! It’s definitely paid off though

        • Cody @ Dollar Habits
          · Reply

          August 31, 2017 at 9:09 PM

          I think it’s awesome that you guys did that and look where it got you. Back when we first got married, I didn’t know as much about house hacking as I do now, but if I could go back in time, we would definitely go that route. Now, with two young kids, house hacking options are a little more limited. I would love to one day purchase a duplex and live in one unit and rent the other. I could get used to the idea of my mortgage being paid for me.

          • Frank
            · Reply

            September 2, 2017 at 1:54 PM

            i wish you success cody, thats a nice plan you have there, it will be a dream to own an estate for me, so i rent out to people too

            • Cody @ Dollar Habits

              September 7, 2017 at 8:01 AM

              Thank you very much, Frank. If you have a plan in place you will absolutely be able to achieve it. Being a landlord is no walk in the park but it can be a huge cashflow potential.

            • Bradley @ passiveincomeblogger.com

              September 24, 2017 at 11:22 AM

              For sure being a landlord is not for everyone, so thankfully property management companies exist! Find the right house that cash flow’s enough (including property management) and off you go.

              I’m pretty sure that when I buy my first rental I will have a property management company look after it. I’m busy enough as it is, lol.

            • Cody @ Dollar Habits

              October 9, 2017 at 4:07 PM

              I hear you, Bradley. If the property management fee is covered by the cash flow then it can be a really enticing option, especially if you are pressed on time.

            • Frank

              October 27, 2017 at 4:18 PM

              you are welcome cody

          • Bradley @ passiveincomeblogger.com
            · Reply

            September 5, 2017 at 2:14 PM

            My wife and I have the same struggle right now Cody. We are giving real thought to selling our primary residence for a multi-unit. I’ve been looking (just online) at fourplexes in my city, but most of them don’t have outdoor space. The house either takes up all the property or the rear of the property has been converted to parking. I know people raise children in apartment complexes all the time, but having to leave your property for the kiddo’s to enjoy some grass is not so awesome.

            • Cody @ Dollar Habits

              September 7, 2017 at 8:06 AM

              I totally understand that. My wife has gone back and forth about it as well, but it would be so hard to leave our home with a large backyard. It’s just not the same if you have to walk down the street in order to play, let alone drive. You’re right, people do it all the time but in our case, it’s just not going to work for us. Owning a four-plex would be a tremendous side income!

            • Bradley @ passiveincomeblogger.com

              September 24, 2017 at 11:23 AM

              The more doors you have, the more money you can make! It also decreases the risk / turmoil of vacancies. If you have a single family and it is vacant, that can be rough. If you have a fourplex with one apartment vacant, you are only out 25% of your rental income, not so bad.

            • Cody @ Dollar Habits

              October 9, 2017 at 4:09 PM

              Oh yeah, that is one of the beauties of the multi-family route. Being able to spread out that risk is a plus, for sure.

            • Frank

              October 27, 2017 at 4:21 PM

              would you consider getting a fourplex cody if you do leave your large back yard

      • Tahina
        · Reply

        August 30, 2017 at 4:12 PM

        Tyler, yes I agree with you that this article really helps but buying a house is farther down the line in the future for me. I will take a tip from and Timothy and save as much money as possible, and save for the future.

        • Cody @ Dollar Habits
          · Reply

          September 7, 2017 at 8:07 AM

          Saving for your future is always going to be your best bet! Buying a home can be an awesome investment depending on the market you buy in.

          • Bradley @ passiveincomeblogger.com
            · Reply

            October 7, 2017 at 8:06 AM

            Cody, did you buy your house at a good time in terms of market pricing / over pricing? Have you seen much market appreciation over the time period you have owned?

            • Cody @ Dollar Habits

              October 9, 2017 at 4:12 PM

              We bought at an awesome time, in 2010, and have experienced a lot of appreciation since then. Thanks for asking.

            • Frank

              October 27, 2017 at 4:22 PM

              bradley
              Have you seen market appreciation over the time period you have owned?

    • Charleen G.
      · Reply

      May 21, 2017 at 5:58 PM

      Great post ?.

      • Tim Kim
        · Reply

        Author
        May 22, 2017 at 12:35 AM

        Thanks Charleen!

      • Cody @ Dollar Habits
        · Reply

        October 9, 2017 at 4:14 PM

        I’m confused. Is it great post question mark or great post period. I’m thinking great post period. 😉

        • Frank
          · Reply

          October 27, 2017 at 4:24 PM

          i am trying to see the possibilities that its period

    • Panocello
      · Reply

      June 5, 2017 at 12:37 AM

      Hi Tim, thank you for the great post! My wife and I started from literally 0 here in the US and 7 years later we are preparing to buy a single family home in the Bay Area. How was this possible ? As you mentioned first we changed our mindset and set an 8 year plan, which we reached in 7 yrs (thanks to the bull market). We created annual, monthly and daily plans. Income-expense sheets, extreme focus, hard work, build a business and no TV. I mentioned this last one as it saves you a lot of time, which you can use to further work on your plan and strategy.

      As an additional note I came to your site from Sam’s (FS) and myself a native of Hungary. It was so amazing to read about your brief life story above as I dont have any friends here in SF who shared a similar background. You lived on 3 continents already, wow. Just out of curiosity are you fluent in Hun and do you have any emotional attachments to the country ? (As I am not sure if you left Hungary on a good terms – what I mean by that given the current political situation). I will keep an eye on your posts and will connect you via instagram. Thank you for the motivating articles!

      • Tim Kim
        · Reply

        Author
        June 5, 2017 at 7:42 AM

        Congrats, bay area isn’t cheap so that’s a big accomplishment! And to answer your question, I used to be fluent in Hungarian, but not any more. I don’t have any negative feelings toward Hungary. I have both good and bad memories from growing up there. It’s a lot different over there now, since the Asian presence grew pretty significantly, so people are at least used to seeing Asians. It wasn’t like that initially, in 1991 when my parents brought us there. And I’m hearing that the younger generation is a lot more open to foreigners, especially Koreans, because of Kpop.

      • Cody @ Dollar Habits
        · Reply

        August 31, 2017 at 9:18 PM

        Wow! That is quite a story you have there, Panocello! I cannot imagine coming to the U.S. and starting from zero. I’m a native and I can barely make it. Haha. Congrats on you upcoming home purchase. Pretty impressive to be able to buy right now in the Bay Area. I’m in Southern California and we have a hot market here right now too, but nothing like the Bay Area in terms of prices. You laid out a great strategy in your comment and it clearly works based on your example.

        • Bradley @ passiveincomeblogger.com
          · Reply

          September 24, 2017 at 11:26 AM

          I know eh? I love hearing stories of success like that. It’s great to see people create success from scratch, very inspiring.

          • Cody @ Dollar Habits
            · Reply

            October 9, 2017 at 4:21 PM

            Totally! I could read stories like that for days. I love reading profiles about self-made millionaires and always have my eyes open for tips and tricks I can incorporate into my own journey as well.

            • Frank

              October 27, 2017 at 4:26 PM

              cody
              that the idea of reading one right? so we can get some tips from them on how the succeeded with their plan

      • Bradley @ passiveincomeblogger.com
        · Reply

        September 1, 2017 at 1:03 PM

        It sounds like you have a very good handle on your finances. Kudos to you for being able to execute your plans so effectively.

        What kind of business did you build?

        • Cody @ Dollar Habits
          · Reply

          October 9, 2017 at 4:24 PM

          I agree. I don’t think someone could execute like that and achieve those types of results without knowing exactly what the heck they are doing. Good motivation to continue educating ourselves on money and investing related topics.

      • Frank
        · Reply

        September 2, 2017 at 1:57 PM

        How did you go about it, i will love to have learn how you did panocelli, starting from the scratch and making it up to that point, any tips?

        • Cody @ Dollar Habits
          · Reply

          October 9, 2017 at 4:27 PM

          That could make for a really awesome guest post here if Tim and Panocello were interested in collaborating. I know I would love to read more details.

          • Frank
            · Reply

            October 27, 2017 at 4:28 PM

            i can’t just see a post from Tim and Panocello and i won’t rush to see what it contains

    • Ms. Frugal Asian Finance
      · Reply

      June 14, 2017 at 7:56 AM

      Great tips! When Mr. FAF and I got serious about buying our home, we were total newbies. Our 2nd realtor turned out to be our great advisor. She guided us through the process and helped us take care of many issues that arose in the process. Buying a new house is exhausting yet rewarding at the same time!

      • Tim Kim
        · Reply

        Author
        June 14, 2017 at 7:44 PM

        Congrats! It took us a year to find the right one 😛

      • Cody @ Dollar Habits
        · Reply

        August 31, 2017 at 9:21 PM

        You’re fortunate to have found such a great advisor in your real estate agent, Ms. FAF. A lot of real estate agents are more salespeople than advisors. We got luck with our agent as well as she was incredibly helpful and knowledgeable. House hunting and all the emotions attached to it is definitely exhausting. We looked for over a year as well.

        • Frank
          · Reply

          September 2, 2017 at 2:01 PM

          lots of real estate agents especially the money mongers tend to sell because of how much they will put in their pocks and that sis bad for business and also for us buying

          • Bradley @ passiveincomeblogger.com
            · Reply

            September 3, 2017 at 3:11 PM

            Unfortunate but understandable. Since the agent makes money by selling houses, that’s why so many of them are sales focused.

            • Cody @ Dollar Habits

              September 7, 2017 at 8:09 AM

              SO true, a lot of agents are so motivated to make a sale it’s like they go into sales mode and its hard to differentiate the genuineness. On the other hand, I can understand where they are coming from trying to hustle. haha.

            • Bradley @ passiveincomeblogger.com

              September 24, 2017 at 11:27 AM

              It always amazes me that more real estate agents don’t own rental properties themselves. They have such an inside edge!

            • Cody @ Dollar Habits

              October 9, 2017 at 4:31 PM

              I have studied for the real estate test and passed the required courses, I just need to take the exam. Like you mentioned, since I plan to invest in rental properties, I am hoping to be able to use that inside edge to my advantage.

            • Frank

              October 27, 2017 at 4:30 PM

              i agree because the higher they sell, the higher commission they get

    • joseph kim
      · Reply

      August 16, 2017 at 9:51 PM

      A lot of this is very practical but I can’t really apply much as of now. Home owning is a bit further down the line for me. For now, I’ll be goal setting!

      • Tim Kim
        · Reply

        Author
        August 16, 2017 at 9:52 PM

        Start saving like a $1 a day man. And when you get to be my age, you’ll have a down payment ready to go. Sometimes it’s easier to think small, than to think big! Because big is a bit too overwhelming at times.

        • Cody @ Dollar Habits
          · Reply

          August 17, 2017 at 10:45 PM

          That is great advice! When thinking of such a lofty goal like saving up a down payment for a house, it can be super overwhelming, even so much so that it could stop us from getting started, either now or ever. However, when you break it down as Panocello mentioned above into annual, monthly and even daily goals, it becomes a lot less overwhelming and a lot more approachable. If you are young enough and save even just a $1 a day and put it into the market for growth (since you have a relatively long time horizon) it can really start to add up quickly.

          • Bradley @ passiveincomeblogger.com
            · Reply

            October 7, 2017 at 8:08 AM

            How long did it take you to save up for your down payment on your home Cody? Did you save as much as you could to the exclusion of all else or did you have a monthly goal?

            • Cody @ Dollar Habits

              October 9, 2017 at 4:35 PM

              That’s a great question. I would say we saved for about a year or so. We didn’t have a set monthly savings goal (although we probably should have) but just saved as much as possible and made quite a few temporary sacrifices in order to do so.

        • Frank
          · Reply

          September 2, 2017 at 2:22 PM

          yes you are right, saving a dollar a day is going to pay off with longer time, and i agree with you about thinking small most times than thinking big, because when you add up this small thoughts, you might end up doing something very big

          • Cody @ Dollar Habits
            · Reply

            October 9, 2017 at 4:41 PM

            I think starting out with a dollar a day is a great idea if that is all someone is able to do in the beginning. It sure beats doing nothing. Ideally, as their income grows, they will increase their savings as well.

            • Frank

              October 27, 2017 at 4:31 PM

              i agree with you, as little is better than nothing

    • Cody @ Dollar Habits
      · Reply

      August 17, 2017 at 11:00 PM

      This is a terrific list, Tim. It provides a great road map for a potential first time home buyers to follow. I think your advice of making buying a home an actionable goal with concrete steps as opposed to an abstract dream is spot on. Our time horizon was fairly short, so we did not take advantage of using the stock market to help build our down payment, so I can’t really add anything there, but numbers 2 and 3 really resonated with me.

      We were very fortunate that we were both completely on the same page in terms of setting buying a home as a combined goal and temporarily “sacrificing” to achieve that goal. We each compromised on a few things, but thankfully we have very similar design and style preferences. Have you ever seen a HGTV show like Property Virgins or House Hunters where he wants a single story ranch style in the country, with carpet throughout and a brick fireplace and she wants a modern home with a sleek design in the city center with stained concrete floors and no fireplace? Haha. That’s where compromise comes in. Compromise is not only the key to a successful house hunt where, in the end, both individuals are happy; it’s also one of the keys to a successful marriage in general.

      • Tim Kim
        · Reply

        Author
        August 18, 2017 at 7:53 AM

        That’s hilarious! Yeah I’ve seen those HGTV shows where the couple have exactly opposing desires. It’s like…what do you want the hosts to do? Magic? 😛

        • Cody @ Dollar Habits
          · Reply

          October 9, 2017 at 4:50 PM

          LOL! I’ve read that a lot of those shows are scripted now, but entertaining nonetheless. I’m just thankful my wife and I have very similar tastes when it comes to homes and interior design, etc.

      • Frank
        · Reply

        September 2, 2017 at 2:27 PM

        hahaha, watching those hgtv shows were really boring for me, anytime my parents do, i just pass off and go to bed

        • Bradley @ passiveincomeblogger.com
          · Reply

          September 3, 2017 at 3:13 PM

          I don’t really like the buying homes shows, but I used to watch a lot of the home improvement shows, mostly Holmes on Holmes. It can be very educational.

          • Cody @ Dollar Habits
            · Reply

            September 7, 2017 at 8:11 AM

            I agree about them being educational. Home improvement looks so easy when you are watching a professional do it on tv. Then I venture into the home improvement store and all of a sudden the job seems a lot more difficult, lol.

            • Bradley @ passiveincomeblogger.com

              September 24, 2017 at 11:29 AM

              This is so true … and it takes me so long to complete projects. I did a lot of renovations in my first decade of home ownership and helped friends renovate their houses too. I can do a lot, including drywall and mud, but I am definitely not fast at it, lol.

            • Cody @ Dollar Habits

              October 9, 2017 at 4:54 PM

              That’s awesome that you have those skills. I have a few home DIY skills myself, but I would really like to expand on that. I have a dream of rehabbing a property and turning it for a profit. I think that would be a great learning experience.

          • Frank
            · Reply

            October 27, 2017 at 4:33 PM

            i will agree with you, home improvement shows are very insightful

        • Cody @ Dollar Habits
          · Reply

          October 9, 2017 at 4:52 PM

          LOL, Frank. Maybe once you have a house of your own you will find them more interesting. I really like to see the different style homes in different locations and the commensurate prices.

          • Frank
            · Reply

            October 27, 2017 at 4:36 PM

            maybe or maybe not. can’t wait to find out myself

    • Cody @ Dollar Habits
      · Reply

      August 18, 2017 at 9:05 PM

      Seriously! It makes me wonder, though, how much of that is for show. I know a lot those shows are scripted now. If that really is the case though, God bless them because with such differences like that, someone is going to have to compromise pretty heavily.

      • Bradley @ passiveincomeblogger.com
        · Reply

        September 5, 2017 at 2:23 PM

        I remember when I read that the home buying shows are scripted, with the house already purchased before filming begins. Lol, supposedly it’s not uncommon for the 2nd or 3rd home to not even be on the market (and be the houses of friends). It’s disappointing, but understandable. If they just followed people around trying to buy a house they would waste a pile of money and time. Most people probably wouldn’t even buy!

        • Cody @ Dollar Habits
          · Reply

          September 7, 2017 at 8:14 AM

          Oh, my gosh, that’s pretty funny. Also, somewhat misleading. I guess it doesn’t surprise me. Most reality shows are scripted in one way or another. I have to say, watching them just won’t have the same allure for me anymore.

          • Frank
            · Reply

            October 27, 2017 at 4:39 PM

            you are right cody, knowing they are scripted makes it not interesting to watch anymore

    • Oluwabukola
      · Reply

      August 20, 2017 at 8:28 PM

      I think Joseph and I are in the same position, can’t really apply much of the above tips right now, hahaha. But when the time comes, I am sure this list of tips will be very helpful. However, I think I will leave with the major lesson in the first tip and apply it to everyday living which is “making what I want to achieve a goal, not a dream- step by step action to realize the goal through an actionable plan. 🙂

      • Cody @ Dollar Habits
        · Reply

        August 24, 2017 at 10:56 AM

        You are making a great decision to start reading and learning about personal finance now, that way when you are in a position to start putting some of the concepts into practice, your knowledge base will already be in place. I did the same thing and it has worked out very well. Best wishes on your journey!

        • joseph kim
          · Reply

          August 31, 2017 at 11:03 AM

          Glad there are other people who are also dipping their feet in these waters. I feel many of the people my age (college) are just moving with the flow (which I am not exempt from). But something I’ve learned and a resounding message on this blog is that inactivity won’t move us from point A to point B. We gotta do something, have a plan, take action.

          • Cody @ Dollar Habits
            · Reply

            August 31, 2017 at 9:24 PM

            It sounds like you are really picking up some valuable information from reading Tim’s posts. That is awesome. Who better to learn from than someone who walks the walk and has already experienced financial success? You are light years ahead of your peers just by reading this blog and actually having an interest in personal finance. Take what you learn here, make a plan and then execute on that plan. Your future self will thank you.

          • Bradley @ passiveincomeblogger.com
            · Reply

            September 1, 2017 at 12:54 PM

            It does indeed pay to have a plan. I bought my house the 2nd year I was out of college, which was always in the “plan”. Getting started early in areas of finance (home ownership, investing, etc) pays off huge in later years.

            • Cody @ Dollar Habits

              September 7, 2017 at 8:17 AM

              That’s awesome that you were able to stick to your plan. That can be a difficult task to do. Good for you. It definitely pays off to have a plan that you are working with to keep you on track .

          • Frank
            · Reply

            September 2, 2017 at 2:29 PM

            you are right joseph, inactivity won’t move us from point A to point B. instead its always going to make us stagnant, not moving at all, we have to be busy, hardworking inother to move forward

            • Cody @ Dollar Habits

              October 10, 2017 at 12:15 PM

              You bring up a really great point, Frank. Becoming stagnant and complacent can pose a big threat to us achieving our goals. It is so important to build momentum and keep moving forward.

            • Frank

              October 27, 2017 at 4:41 PM

              forward should be the only way to go for us we should try to always stay motivated

      • Frank
        · Reply

        September 2, 2017 at 2:31 PM

        i am also in the same position with you bukola, i think we have to live our dream inother for nus to have it, if you understand me, when you have a plan, you have to be optimistic its going to work, no looking back, always push forward, i believe if we keep that in mind it will pay off

        • Cody @ Dollar Habits
          · Reply

          October 10, 2017 at 12:17 PM

          I think you are right, Frank. It is important to have conviction and belief in what we are trying to accomplish. If you don’t have that, I think it will be easier to give up and throw in the towel.

          • Frank
            · Reply

            October 27, 2017 at 4:43 PM

            for us to stay motivated, we have to believe in ourselves first, when we do not have a belief of ours, we are likely to give up easily

    • Tahina
      · Reply

      August 23, 2017 at 3:14 PM

      I am going to take all your tricks and tips to heart. Thank you.

      • Cody @ Dollar Habits
        · Reply

        September 8, 2017 at 11:44 PM

        There is definitely a lot to learn here. Even if it will be a while before you plan to buy a home, it is good to familiarize yourself with these ideas and concepts now.

        • Bradley @ passiveincomeblogger.com
          · Reply

          September 24, 2017 at 11:33 AM

          Most definitely. Knowing is half the battle and can save you money in the long run. Knowing about PMI, how much you need to save, taking advantage of first time homebuyers plans, etc can all help you map out a path to your first home purchase. I find a lot of people know nothing until they decide to buy a house and start house hunting (often without even being pre-approved for a mortgage).

          • Cody @ Dollar Habits
            · Reply

            October 10, 2017 at 12:26 PM

            I have witnessed that same thing many times in my own circle. I definitely could have stood to learn more before buying, but we did quite a bit of research and it worked out well for us.

        • Frank
          · Reply

          October 27, 2017 at 4:48 PM

          a good point you have cody, even if we are not ready to own a hose now, it should ‘t stop us from noting necessary points relating to getting a house

    • Cody @ Dollar Habits
      · Reply

      August 31, 2017 at 9:29 PM

      I agree with you 100%, Frank. I’m maybe a little farther along in my financial journey than some of the younger commenters here, but nonetheless, I have found Tim and his blog to be a great source of inspiration and motivation.

      • Bradley @ passiveincomeblogger.com
        · Reply

        October 7, 2017 at 8:11 AM

        That’s the great thing about surrounding yourself with people of the same mindset, you get to feed off of each others enthusiasm, goals, and achievements!

        • Cody @ Dollar Habits
          · Reply

          October 11, 2017 at 12:30 PM

          Absolutely. That is one of the main things I love about the online personal finance community.

        • Frank
          · Reply

          October 27, 2017 at 4:50 PM

          exactly cody, when you surround yourself with the people with the same mindset as you are there will be a likely reasoning

    • Bradley @ passiveincomeblogger.com
      · Reply

      September 1, 2017 at 12:58 PM

      Sounds advice Tim.

      ” The numbers have to work out.” I can’t agree with this statement more. Don’t buy more house than you can afford. And don’t buy more house just *because* you can afford it! I bought my house early in my career, so I wasn’t in danger of buying too much house. Folks today that have been working for decades get caught up in more more more and purchase much more home than they actually need, simply because they can afford to do so. Your home will likely be your single most expensive purchase you make, the amount of money involved can be staggering. Spend wisely.

      • Cody @ Dollar Habits
        · Reply

        October 11, 2017 at 12:33 PM

        Such sage advice in your comment, Bradley. I know quite a few people myself who are “house poor.” They bought too much house and now can’t afford anything else. I’m so glad I didn’t fall into that trap.

    • Bradley @ passiveincomeblogger.com
      · Reply

      September 3, 2017 at 3:19 PM

      Is there a fist time home buyers plan in the US? In Canada, people buying a home for the first time can use some of the money in their tax advantaged accounts. A common strategy can be to save up your deposit, put the money into your RRSP (like a 401k), get the tax rebate, withdraw funds back out from the RRSP for your down payment. You now have your down payment + the tax refund, which you can use for closing costs, put it towards the down payment, renovations, etc. The only caveat is you have to repay the amount you withdrew within 15 years and the max you can do is $25k.

    • Cody @ Dollar Habits
      · Reply

      September 8, 2017 at 11:40 PM

      Wow, that sounds like a pretty awesome strategy. That would be a great way to cover some or all of your closing costs, depending on the amount. In the U.S., first time home buyers are allowed to take $10,000 penalty free from the IRA to apply toward a down payment.

      • Bradley @ passiveincomeblogger.com
        · Reply

        September 24, 2017 at 11:34 AM

        That’s great. I think more people should take advantage of these programs, you can save a lot of money in the long run.

        • Cody @ Dollar Habits
          · Reply

          October 11, 2017 at 12:35 PM

          Absolutely. Sadly, most people simply won’t bother with it or won’t take the time to learn about it. I actually bought my house before I had any money in an IRA so it didn’t really apply to me at the time.

          • Frank
            · Reply

            October 27, 2017 at 4:52 PM

            those people who do not bother with it do not know the benefits they can get from it

    • jo joseph
      · Reply

      September 12, 2017 at 4:14 PM

      this doesn’t apply to me but its still helpful

      • Bradley @ passiveincomeblogger.com
        · Reply

        September 24, 2017 at 11:35 AM

        Jo, maybe you know someone who could benefit from the article on buying a house? Send them the link and spread the knowledge!

        • Cody @ Dollar Habits
          · Reply

          October 11, 2017 at 12:37 PM

          That’s a great suggestion and a great way to pay it forward with information that could really make a big difference for a first-time home buyer.

        • Frank
          · Reply

          October 27, 2017 at 4:54 PM

          thats a form of enlightenment,most people need to be enlightened about these stuffs

      • Cody @ Dollar Habits
        · Reply

        October 11, 2017 at 12:40 PM

        Even if you don’t think it directly applies to you now, I still think it is a great idea to educate yourself as much as possible so in the future when you need the info., you already know it and can benefit from your knowledge.

    • Marlinda
      · Reply

      October 6, 2017 at 10:48 AM

      Hi Tim, thanks for the great post! I’m allready imaging my dream home. Just waiting to earn that first sallary… Now I have tips to go on to achieve this goal as soon as possible! Having a place that is yours and where in you can stay as long as you want and knowing that the money you pay for it every month goes into paying it off, it’s growing your assets not just a expense.

      • Cody @ Dollar Habits
        · Reply

        October 11, 2017 at 12:43 PM

        Good for you for educating yourself on the process now, Marlinda. I love that you are already imagining your dream home. Be willing to put in some hard work and maybe a little sacrifice in the beginning and you can definitely achieve that dream. Best wishes to you.

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