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How can I save up for a down payment on a house?

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I would love to be able to afford to buy a house in the next few years, but am having trouble getting on track with saving up for a down payment. Are there any ways that I can make saving easier?
asked Aug 2, 2015 in Real Estate by blueskies (57,070 points)
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Buying a home is a major commitment, and it may mean making sacrifices. First, you should find out how much you can afford. Once you figure out how much house you can buy, you can estimate how much you will need for a down payment. That will give you a more solid goal to work toward. Make a deadline. For example, if you want to buy a house in five years, divide the down payment by five, and that amount is what you have to save every year over the next five years.

Write down a budget of your income and expenses, and see where you can reduce your variable expenses to reach that savings goal. It will probably require some tough sacrifices, like cutting back on eating out, vacations, entertainment, clothing, etc. You can even consider taking a second job temporarily.



You should set a special savings account just for the down payment. Every time you get paid, have your bank automatically transfer the predetermined amount into the special savings fund. Thus, you are paying yourself first.

It will be helpful if you pin up a photo of a house that you like (not necessarily one that you plan to buy) and a visual chart of your savings progress. You can watch the savings go up, month after month. Put that on your refrigerator so you can see it all the time as encouragement.

Resist the temptation to dip into the account. If you make a solid commitment not to touch that savings account, you will be able save up for your house.

Here are some more tips on how to save money:

http://blog.coldwellbanker.com/5-tips-for-saving-for-a-down-payment-on-a-home/
http://www.consumerreports.org/cro/money/personal-investing/ramp-up-your-savings/five-strategies/ramp-up-your-savings-five-strategies.htm
answered Aug 3, 2015 by turker88 (23,620 points)
selected Aug 3, 2015 by blueskies
+4 votes

Depending on your finances, there are many ways you can begin saving for a down payment.

  • Set a goal!
  • Create a budget and stick to it.
  • Open a savings account and make adding to it a priority.
  • Don't overspend. 

Check out this image to see how others are saving for their down payment:

It's not always easy to make sacrifices, but in the end, it will all be worth it!

 

References:
http://www.thesimpledollar.com/buying-a-house-how-to-save-for-a-down-payment/
http://twocents.lifehacker.com/how-to-start-saving-for-a-home-down-payment-1541254056

answered Aug 2, 2015 by sburch75 (14,140 points)
+3 votes

There are several ways to save money. The first way is to set a budget for yourself. Only spend when you need to buy necessities and pay bills. Instead of ordering out or shopping for new clothes, set that money to the side, especially if you do not need it. Aside from setting a budget, it is a great idea to do a few different things on the side of extra cash. There are survey sites, such as Inbox Dollars, and sites that pay you to listen to music and talk about what you liked and didn't like, such as Slice The Pie. If you can make some extra money to put into a bank account, you will have the money saved in no time.

 

 

References:

 

http://extracashandrewards.com/my-top-picks/

 

http://www.americasaves.org/for-savers/make-a-plan-how-to-save-money/54-ways-to-save-money

answered Aug 2, 2015 by AmyLynn (20,980 points)
+4 votes

 

It does not have to take ten or fifteen years to save up enough money for a down payment. Frugality is the key, however. Think about how you can reduce your daily expenses [1]. Do you still have cable? Consider getting Netflix or a similar service instead. Doing so often cuts that particular bill in half, if not more. Stick to the basics. Don't go out to eat. Pay only for what you needs. Keep your goal in mind at all times.


Do you have a lot of "junk" hanging around? Now might be the time to declutter. Organize yard sales and put all the extra money in the bank. Every little bit adds up.


Do you have any hobbies? You may be able to turn something you love to do into a small source of income that you can save for a down payment [2]. For example, if you are a computer wiz, perhaps you could help others with their websites.


Finally, are your current accommodations more than you need? Would it be possible to downsize? Sacrificing a little for a relatively short period of time will be worth it in the end.


[1] http://www.investopedia.com/partner/gobankingrates/articles/personal-finance/032515/save-30000-home-down-payment-5-months.asp


[2] http://www.washingtonpost.com/news/get-there/wp/2014/09/09/how-to-save-for-a-down-payment/


Infographic credit: http://www.mortgagecwf.com/knowledge-sharing/save-earn-for-down-payment.html?utm_source=infographic&utm_medium=cpc&utm_campaign=infographic-directories

answered Aug 2, 2015 by Unckelli (50,310 points)
+3 votes


Purchasing a home is a wonderful long-term investment. The down payment is certainly challenging for many people and saving enough money can take time without the right approach. So, what is the right approach? Let's take a look at a few tips which should assist along the way.

Budget Everything

It is pertinent to have a grasp of money coming in and going out on a monthly basis. All expenses should be accounted for. It is essential to have this information in hand prior to moving forward [1]. Those who don't  budget are going to have wayward months where they are not saving enough. Structure is a must.

Use One Car

There are many homes which have two cars in them. This is not necessary most of the time and should be avoided. Insurance on one of the cars could be put towards the down payment [2]. Add in the gas and other related expenses which would be saved on.

These are key tips which should be considered prior to moving forward. Saving money does not have to be as impossible as you may assume.
References
1. http://globalnews.ca/news/1765037/ways-to-save-a-down-payment-for-a-home/
2. http://www.theglobeandmail.com/globe-investor/personal-finance/mortgages/save-up-for-a-down-payment-the-young-adults-struggle/article4484367/
answered Aug 2, 2015 by kingusama92 (23,380 points)

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