Creative, Achievable Ways to Save for a Home

See how every little you set aside really can add up to a down payment.
  • Househunting
  • Homeowners insurance

3 minutes read | June 9th 2020

Congratulations! You've made one of the biggest decisions of your life — the decision to save for a home — so you're really nailing this whole adulting thing. You might be wondering just how big of a decision this actually is and what it'll require, though. Traditional wisdom (and, you know, many mortgages) recommend putting 20% down as your initial payment. Most financing doesn't require this anymore, but having a sizeable down payment along with funds for closing costs makes the process easier. It might even lower your interest rate.

That's all well and good once you're buying the house. But before you start saving, it helps to know your target. Start looking at the average price for the type of home you want in the location where you want to live. From there, consider getting prequalified for a mortgage so you know the interest rates and how much of a down payment you'll have to come up with.

Once you have this information, make your plan. You're (hopefully) saving some money each month and putting away something for retirement, so how can you come up with a down payment of tens of thousands of dollars? Here are some reasonable ways to save that really can work.

Get That Side Gig Going

Or add another one. Earmarking your side gig money for a down payment fund can help you see that growth more quickly. Sell things online that you aren't using. Since you're planning on moving, this can cut down on what you have to schlep to the new place, too.  Take on a part-time job for a short time to get a head start on savings. Whether you begin ride sharing, freelancing, or monetizing your social media, put all this money towards your goal.

Revisit Subscriptions and Monthly Fees

This is easy, especially if you find that you're not using the things that you're paying for each month. If you belong to three gyms and only use one, ditch the monthly fees on the other two. Subscribe to an online membership for unlimited reading? Go to the library for free. Cut the cable and limit your streaming subscriptions. Review all these little fees you might be forgetting about and add them up. Cancel what you don't use and dump that amount into your savings. Take advantage of apps that do this work for you and show you how you can save — it could amount to hundreds of dollars a month.

Set Aside Windfalls

If you receive unexpected money, put that right into your house fund. If you received tax refunds, tag those as savings, along with job bonuses. If you receive a raise at work, commit that extra money to your savings and continue living on your pre-raise pay amount.

Go Public

If you really want to save for a house, let those who regularly get you gifts know. Rather than spending $50 on another scented candle or a gift card, they might just give you a monetary gift to put towards your home fund.

Make Your Budget Work

This seems obvious, but really look at your budget. It's not realistic to forgo all coffee or never go out with friends. But eating dinner out every night? That's a no-no. Take a deep dive into your spending and figure out how you can still do the things you enjoy — maybe just a little less often — while saving more. You might be surprised by what you find, which means you'll save more and hit that goal faster.

Set Mini Goals

Speaking of goals, how you configure them matters. Think about it. What sounds more palatable: saving up $50,000 over the next five years, or saving up $10,000 each year? Setting mini goals on your road to the big one (and reaching them) can give you the motivation to keep going. It also makes things feel more doable, which is encouraging when you're looking at a longer-term prospect like saving for a home.

First find out what you need to save. Then look at your current situation and figure out what's reasonable. In no time, you'll have that money without sacrificing your savings and sanity.

Once you're ready to make the leap and throw down your chunk of change for a new house, you'll need to protect your asset. That's where we come in. Learn all about the coverage we offer and how it can protect your new home sweet home.