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Christian Weddings

***Everyone saving to build a house debt-free***

I noticed a couple people in the thread about debt talking about wanting to save up to build a house debt-free.  That has always been mine and FI's dream.  We got a little sidetracked and almost bought a house with a mortgage recently, but now we have backed down from that and just have my student loans to deal with.

So, how are you saving up?  CDs?  High-Yield Savings?  What sorts of things do you do to get yourself to the goal of saving your money for a house?  And if you don't mind my asking, how much are you planning to save up?

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Re: ***Everyone saving to build a house debt-free***

  • twixinthemixtwixinthemix member
    500 Comments
    edited December 2011
    I got rid of my CD's last year because they really don't yield much interest anymore.  Back when I was a kid they were good and had a few (my dad's a CPA and taught me how to save very early on!) but now they just aren't worth the stipulations.  The funny thing is when I broke my CD's early, the "punishment" was literally less than $1 for 3 separate cd's with nearly $7,000 in it.  I thought it had to have been a mistake, and even the banker was surprised!!

    So now, I have a lot of money in a Roth IRA and some stocks.  Instead of a savings account, I now use a Money Market account as long as I either put $25  a month in it (which is automatically done) or can keep it above $10,000.  If I don't, then I'd be charged a monthly fee for it.  I have not contributed to my 403 b because I knew I wouldn't be staying more than just a couple years and wouldn't get getting vested at all into their retirement plan.  I just decided to bag it, especially with having the Roth IRA and the school's salary being low already!

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  • AllyG303AllyG303 member
    Eighth Anniversary 1000 Comments Combo Breaker
    edited December 2011
    I have a savings account that I've put money into for a while now (for whatever big things I want to spend it on).  I have about 12k in it right now.  I usually put about $300 a month into savings.  We're looking to buy a home (new build) in August so it will be ready in March (FI's lease is up in Feb).  He was in the Air Force, so we're going to use the VA loan and only put $1 down (no down payment required with VA loans).  We will use my savings to pay for the furniture, fridge, and whatever else we need for the house. 
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  • iamjoesgurliamjoesgurl member
    2500 Comments Fifth Anniversary
    edited December 2011
    If I had tried to save enough to build/buy a house, I don't think I ever would have.  I decided that I would rather buy a house for a known amount than to save money and not really know how much the house would be someday or whether my investments would do well enough to pay for it.

    My company is a public company with an Employee Stock Purchase Plan so I have always contributed 4% to it (which is matched at 50% so it is really like investing 6%).  I used that money to pay for a down payment on the house (20%).  It took me until I was 31 years old to even be able to do that even though I am a really good saver.

    I will say, however, that after borrowing from my parents for my 1st car and paying that back in 2 1/2 years, I have bought my next two cards without a loan.  In addition to investing in the stock plan, I save a certain amount a month in an account through the Wesleyan Investment Foundation which is through my church and is used by churches for their building projects.  I get 3% on that account which is not FDIC insured but I have faith that God will provide for the churches to allow them to pay back on their loans.  The return of 3% is hard to match these days.

    I could invest in other mutual funds but I'm not a huge risk taker.
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  • SuMmErKuTiESuMmErKuTiE member
    2500 Comments Fourth Anniversary 5 Love Its Combo Breaker
    edited December 2011
    There's no way DH and I could come up with a couple hundred thousdand on our own so we just did an FHA loan and put down the 5% and are coming up with the closing costs as well. We definitely still have other debt as well, DH's car, my student loans, various credit cards, but I'm just thankful that I cleared away my debt from the mistakes I made in college and both DH and I have excellent credit scores even though we have revolving debt.

    DH and I have a great savings plan for the home and haven't been spending as much lately which has helped us pay off more debt and come up with the money we've needed for the house. I joked that it's like deja vu from saving up for the wedding last year.
  • DramaGeekDramaGeek member
    2500 Comments 5 Love Its
    edited December 2011
    Even as frugal as we are, it would take years for us to save enough to buy mortgage free.  You can't get a decent house in a decent location for under $150,000 here, and that would be something like our first house - under 1000 sq ft, one bathroom.    It wasn't worth it to us to spend all those years with rent and no tax write offs.  We overpay on our mortgage and will have our 30 year paid of fin 15.  Until then, yes, we are paying interest, but it helps us in the end because of the tax write off.  When we do pay it off we'll up our charitable contributions.
  • azdancer8azdancer8 member
    1000 Comments
    edited December 2011

    Our situation is a little bit different. We don't need the entire amount to start on a house. DH and his dad are in construction, so really all we need is enough to get us to a good "stopping" point each time.

    For example, we would only need about $5000 to build the foundation once we have the lot, and then we could wait a bit before needing more. This is a process that could take us a few years simply because DH would be doing the building in his spare time. Technically, we have enough right now to get started, but I want to have a little bit of a nest egg just in case of emergencies.

    While we don't set aside a specific amount monthy right now, once I start working my entire salary will go into savings. We'll save up pretty quickly then. :)

  • kitkat610kitkat610 member
    100 Comments
    edited December 2011
    FI and I are not looking to buy a house outright. I have been saving for a long time and have roughly 20K in savings. It is a normal savings account but that particular bank has 1.1% interest right now (it was 5% when I opened the account a few years ago) with no minimums and no fees. We also plan to use the 401Ks from our previous jobs for the down payment because the transfer process proved to be difficult. We have started fresh. I think buying a house outright would be amazing but not feasible like some PP said without the tax benefits etc. Also, as I am starting school in the Fall, we will wait until next year to see what our financial situation looks like on 1/2 the income. All told that is about 40K that we could put towards a house but we will probably leave some in savings for those expenses that pop up when you do own a house.
  • edited December 2011
    FI and I want to build a house, and what we would like to do (if possible) is save up 25% of what it would cost to build.  Mind you, in the South it is dirt cheap to build a house compared to other areas of the country.  We can probably build a 2,000+ square foot beauty for around $200,000.  Anyway, we want to save up 25%, put 20% towards a down payment, put the other 5% in an emergency fund, and finance the rest.  We think that's probably more feasible than buying in cash.
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