Whether you want to save up for a down payment or your mortgage payments, consider these legitimate ways to make more money so you are prepared for emergencies and can better afford your own home.
- Reports: Three in Five Americans One Paycheck Away from the Street
- 5 Legitimate Ways to Make More Cash
- Expand Your Income Now
Reports: Three in Five Americans One Paycheck Away from the Street
One of the top pieces of advice that financial experts give to their clients when they are considering buying a home is to put together as much cash as possible for the down payment. That often means figuring out ways to make more income.
In most situations, a little extra cash certainly would not hurt, according to the findings of a January 2015 poll by Bankrate. More than three out of every five Americans (62%) don’t have any emergency savings at all for unexpected events such as hospital stays or big auto mechanic bills. Here is how the 1000 US men and women who were surveyed said that they would handle an emergency:
- Cut their immediate living costs – 26%
- Get a loan from a loved one – 16%
- Put it on a credit card – 12%
Granted, 1000 is a relatively small pool of people. However, another study of 4000 Americans published by the US Federal Reserve backs up the notion of dwindling savings accounts. “Savings are depleted for many households after the recession,” reported that study. The Fed found that almost three in five households (57%) that had savings before 2008 had partially or completely used that money to make it through the Great Recession and the years thereafter.
Here’s another way to look at it: the Brookings Institution revealed in April 2014 that more than 25 million Americans were living paycheck-to-paycheck.
In other words, it’s become the “new normal” to have no financial cushion. Are you one of that vast population of people who are without savings but need a new home? If so, you need to figure out how to bring in more money.
5 Legitimate Ways to Make More Cash
To build your safety net and prepare for homeownership, these five tactics can work:
#1 – Sit down with your boss.
It is easy to think that the only solution is to get another job. Actually, you can work with the one you already have. You just have to sell yourself to your boss, discussing your career path in relationship to your salary.
No one is going to just hand you more money, though. Make a strong business case. “The best way to do this is by showing your boss how much value you’ve added to the company this year,” says Erik Folgate of Money Crashers. “What projects did you complete, what accomplishments do you have?”
#2 – Go to a fee-only financial planner.
You don’t just want to save but to save smartly – which means you want to put it into strong investments. Meeting with a financial planner can help. A skilled planner can suggest small adjustments to your investments to allow faster growth of your savings.
#3 – Create a company out of your hobby.
One of the best ways to make additional income is to take something you love and turn it into a business. Just don’t get caught up in the notion of spending money to make it. In other words, don’t go into debt, says Folgate. “Brainstorm a business idea that costs less than $1,000 to start, and make sure it doesn’t run your life,” he advises. If you take this route, don’t expect a windfall of cash overnight. “Blogging for profit is a great way to make money,” says Folgate, “except it won’t make anything for a long time.”
#4 – Become a real estate investor.
It may sound strange to think that you could better afford to buy your dream home by first buying and renting out a home to another household – but that tactic can actually work. Just like preparing to buy your own house, though, make sure that you are ready to take that leap.You want to put forward a large down payment and investigate the market of the neighborhood where you are planning to buy. Look at the rent in comparison to all the costs – mortgage, taxes, insurance, repairs, etc.
#5 – Put yourself out there as a consultant.
Do you have a lot of specialized knowledge? The answer is probably yes if you’re in IT, accounting, business management, or numerous other areas. A good way to expand your income is to put that niche understanding you have to work, offering yourself as a consultant, Folgate suggests. “Check to see what other consultants in your field are making,” he says, “and start marketing yourself to anyone and everyone you come in contact with throughout your day.”
Expand Your Income Now
If you are living paycheck-to-paycheck or your savings are modest, making extra cash each month can be put into an emergency fund, used for a down payment, and set aside for the mortgage payments on your new home. Are you looking to buy soon? At Realty.com, we offer the quickest way to search real estate listings online. Learn more.