18 Easy Ways to Save for a Down Payment


Are you dreaming about buying a house in the near future?  Do you have a down payment?  A down payment is the cash amount you put down to purchase the home.  When added to the amount of your mortgage this will equal the sale price of the home.

How much do you need?  If you can swing it, 20% of the sale price of the house is ideal when you are saving for a down payment.  Having 20% down will help you avoid paying for PMI – private mortgage insurance.  This would be an added expense on your monthly mortgage payment.  However, it may be a struggle for some people to save 20% up front.  And these low interest rates can’t last forever!  There are Conventional loans for as little as 5% down and other special loan programs that may fit your needs.  Discuss your options with your mortgage broker before deciding what works best for you.

Now how do you save up for your down payment?  Here are some ideas to get you started!

  1. Save your change – Pay in cash for everything you purchase from gas to fast food. Save the change in a coffee can or other container you keep in your car.  Feel free to also toss in singles and fives once in a while.  Empty it out every week or two into your saving account.  You will be surprised how fast it will add up!  I actually do this to save up for our vacation every year.  It’s painless and it works!
  2. Shop savings accounts – Shop around to find the best interest rates for bank savings accounts. Many banks offer money incentives to open a new account with automatic deposit.
  3. Automatic deposit of your paycheck – Sign up for automatic deposit of your paycheck if your employer offers it. Then setup a predetermined amount from your checking to transfer to your savings account.
  4. Review your spending – Consider where your money is going regularly every day. Expensive coffee every morning or eating out for lunch every day can really add up.  If you usually spend $7 on a fast food hamburger or salad for lunch every day at work you can save $140 a month or $1,680 a year!
  5. Resist impulse purchases – Try to delay purchasing anything non-essential at least for a day or two. You may find the urge has passed by then.
  6. Cable TV – Cable TV or premium television channel subscriptions can add up. How much can you save by cancelling a movie channel?  Also check out your local library for free movie rentals and book downloads.
  7. Bring a grocery list and stick to it – Make it a game and see how fast you can complete the list. Purchase only seasonal produce.
  8. Use coupons – Look for coupons in the newspaper, in your mail and online coupon websites. Try to use coupons with items that are already on sale and save twice!
  9. Transfer your credit card balance – If you carry a balance on your credit card, shop for a good rate for balance transfers. You can often find zero percent introductory rates.  And then take the card out of your wallet and stop charging until it’s paid off.  This will also help your credit score!
  10. Have a garage sale – Plan to have a garage sale and sell all those things you really don’t need. This is also a great way to start clearing out some things so you have less to pack up later.
  11. Rewards programs Sign up for customer rewards cards at stores you frequent.
  12. Cancel expensive health club membership – Shop for a more reasonably priced health club membership or work out at home.
  13. Review your insurance coverage – Contact your insurance agent to review your coverage. Do you have too much coverage on an older car?  Switching to a higher deductible will also lower your bill.
  14. Delay your salon visits – I wouldn’t think of asking you to fire your favorite hair stylist or cut your own hair! But if you simply wait two extra weeks between salon appointments you will make two fewer appointments per year!
  15. Cook your meals at home – Try to refrain from going to restaurants or ordering carry-out. While you are cooking make enough to freeze one meal for next week!
  16. Grow your own herbs – Plant some in a pot or window box in early summer for fresh herbs into the fall.  Then bring the plants inside to a sunny window and keep it going all winter.
  17. Party at home – Instead of heading for your local watering hole, invite your friends over and ask everyone to bring their favorite drink or appetizer.
  18. Save money on rent – Ask your parents if you can move in with them while you are saving for a down payment – rent free. It’s guaranteed that you will be super motivated to save!

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