Topics

My Story: Saving to Buy My First Home

By: Jacob G., University of Wisconsin Stout

I guess you could say that at the age of 19 I was similar to most other college kids: short on money, but finding every way to spend it. After spending a short period of time in the military right out of high school before being honorably discharged, it was back to the local community college. I didn’t have a lot of cash because I didn’t see the importance of saving it. That’s where the story begins.

The summer going into my first year of college, I was still living at home with my parents. I was getting kind of annoyed with it, especially since my three youngest siblings were living there as well. Talk about chaos! My parents could tell that I was getting frustrated with the hectic activity going on, so one day my mom suggested I look into buying a house. This caught me off guard. Wasn’t home ownership reserved for adults with a steady income? The idea seemed ridiculous, but my mom convinced me that with a smarter financial plan and more saving, I could afford it. So I looked into local real estate and began to notice just how reasonable this could be. Some homes were as low as $25,000!

With the new goal of buying a house, I began a financial plan. I talked to the bank to see about mortgage opportunities and how to take out a loan. I got a job at a roofing company over the summer and then worked at the university’s dining facility, saving every penny I made. In the meantime, I looked at many different houses. With this approach I learned many things: the importance of having a good credit score, how to take out a loan, what a mortgage is and how it works, and many other things. Meanwhile, all my other 19-year-old friends thought I was crazy for trying to buy a house at such a young age, but I was determined.

The savings began piling up, and within a year and a half I had saved nearly $30,000-a nice sum for a prospective homeowner! However, I had no luck in securing a home, and it was time for me to transfer to a four-year university. I was a bit disappointed at first. My fierce savings plan as well as my many meetings and discussions with realtors, bankers, and financial advisors seemed to have been for nothing. I couldn’t buy a house now that I was at a bigger, more expensive university.

After a while, I looked back on my home search experience. It became clear to me that I had actually gained a lot more than I would have imagined. Going into it, I was just a kid who loved spending money and knew very little about having a financial plan. I was living life paycheck to paycheck, buying whatever I wanted with whatever money I could sum up. Now, I have held tight to the financial plan I started. I only spend on necessities. Of course, I still have most of my savings to help pay for college, so that carried over as well.

Some of my friends think I failed. I can’t tell you how many times I heard, “I told you so!” What they don’t know, however, is that aside from the money I saved up, the biggest thing I gained from the experience is the importance of establishing a financial plan. I also learned a lot about what to look for in a potential home, how the bidding process works, and how to effectively haggle with realtors. In the end, I believe I succeeded. I didn’t secure a home, but the experience and life lessons I learned will ensure a lifetime of educated financial decisions. The next time I go house hunting I’ll be ready. Until then, my financial plan will remain firmly intact.