Home ownership has plummeted during and after the United States economy crashed and is at a record low, since 1970, of 62.9% (as of July 2016). So does the fall of our economy play a role? Sure! My girlfriend and I were victims of the “pink slip” phase after several hardworking years in the workforce. A local school district budget was short, so laying people off became an option to ensure there were sufficient funds for the next few years. As a result, my girlfriend was laid off. I, on the other hand, received another fate; it was competition. To remain competitive, financial companies shipped some of their services overseas (India, Poland, and China). This freed up funds to pay off debts and fund other ventures. So what happened to me? Lost my job to someone overseas; not someone or an ethnicity taking my job locally.
Most of my colleagues were not able to find a sustainable career job after graduating. Because of this, they relied on temporary contracts and odd jobs to pay their student loans (because it kicks in after 6 months), weekend hobbies, and monthly expenses. Some were lucky to find a job locally with Corporate America, while others decided to move to another city or state.
How did my girlfriend and I manage to purchase our first home together? Here is what I learned (philosophies I developed) and followed:
Take any job related to my current field (Finance): Sure I can opt out for unemployment and live life to its fullest at $450.00 a month; unfortunately (or fortunately) I didn’t follow the path of least resistance. I knew I had unemployment in my back pocket so I decided to take some risks.
a. My primary goal was to stabilize my finances: Finding a full time job may take an average of 3-6 months. Since that was the case, I decided to contact local agencies to find me a temporary position. Although they can range anywhere from 1 day to a couple of years, it didn’t matter; paying the bills took precedence.
b. My second goal was experience: It was either 6 months of unemployment then find a job, or get a job for the experience. What a dilemma. Of course I choose to gain experience. Why, you may ask? If I improve my value to the market, I believe I will lower my chances of getting laid off in the future.
Education: After 6 months of being laid off, we decided to take our education to the next level: Masters. Why? We believe our job loss wasn’t just due to a bad market, but also lack of experience and education. I took the first leap of faith and started my Master of Business Administration program fall of 2012; while working full time. After a year, my girlfriend took her leap of faith and started her program (Master of Education) fall of 2013 while working full time and PREGNANT! Do you want to know how long? My daughter was born in January 2014 so take a guess! My Wonder Woman.
Continuous Improvement: We believe our skills need to be improved and crafted over and over to ensure it meets or exceeds current market/work standards.
Cash is King: After settling my credit card debt, I knew something was wrong; our spending habits and philosophy with money. Things had to change.
a. Cash: Besides large purchases (car, home, etc), every purchase going forward was done with cash. Very simple, if we cannot afford it with cash, it is not on our shopping list.b. Free up cash: Eliminating or cutting expenses.
i. We lowered out internet bill after viewing our monthly usage. Meaning, we opted out for a lower package based on the amount of internet and speed we required to get our work done. ii. Since internet streaming is becoming popular, we eliminated cable services. iii. We found lower car insurance rates with another premium company. iv. We also kept our thermostat to a confortable degree and utilize fans and space heaters to offset the difference. v. Buy what we need, not what we want, until we were back on our feet.c. No new car until life changes (kids) or the wheels fall off (breaks down and unfixable).
Shop before you buy: With the power of the internet, getting prices from different vendors was easy. Every time we needed new tires, a contractor (home repairs), auto repair, and other services, I will obtain a competitive quote before making a decision. This simple technique saved us thousands of dollars.
By following these simple methods, we were able to substantially lower our monthly expenses, obtain a career job related to our field, increase my fico score from 650 to over 700, have over 6 months of liquid assets available, and have enough funds to down our first home together (after 2 years). Yay!
