How I Saved The Down Payment For My First House

Since I was a little girl I’ve wanted my own house. A place that I could call my own and decorate to my personal taste. During my childhood dollhouses had to satiate that desire. Once I grew up and had been working full-time for a few years I started to pursue this dream by saving up a down payment.

Related read: How To Financially Prepare As a First-time Home Buyer

From doing research and talking to people I knew it was best to have about 20% to put down and when I started saving that was my goal. This was a little tricky because depending on the house, the dollar amount for 20% would vary, but knowing the maximum amount I’d want to spend helped me figure out a number I should shoot for.

(I am not a financial expert. All information is based on my own personal experience and research. This information is not meant to be financial advice and is just for educational purposes. This post includes some affiliate links. Should you click an affiliate link and make a purchase I may receive a small commission at no extra cost to you.)

Once I had a goal, I had to figure out how to achieve that goal. When I first started working towards my goal the best way to do that was to save, save, save. This meant saving as much as I could of what I was making and finding ways to earn a few dollars here and there that could also be saved.

Related read: How I Decided I Was Ready To Buy A House

To save as much as possible, I identified several tactics that would help me. So when I did end up buying a house, I didn’t quite put down 20% I did make a sizable down payment which I wouldn’t have had if I hadn’t done the following:

1. Followed a budget

I know budgets are looked at negatively because many think it's something that tells you what you can't spend. I used my budget. to tell me what I could save. Before the beginning of each month, I would set my budget to figure out what I needed to allocate toward bills, living expenses, entertainment, and savings. Then I would see what was left over and could also be allocated to savings.

Additionally, tracking my spending each month let me see where I had leftover dollars that I could put in my down payment savings account. I don't think I would have saved as much as I did as quickly as I did without the budget.

2. Lived below my means

This was probably the biggest way I saved money over time. It was hard in the beginning because I didn't make a lot of money and didn’t have a lot of disposable income. I soon realized that to save as much as I could I had to spend less. As I advanced in my career and received a raise I would adjust my budget so most of the extra income was being put into savings or retirement accounts. This meant that I

• Stayed in older, cheaper apartments instead of moving to newer more expensive ones 
• Shopped mostly sales and used coupons when it came to groceries and other items like clothing
• Didn’t eat out much
• Wasn’t updating my wardrobe every season
• Didn’t go on elaborate vacations every year and saved up for the ones I went on

3. Stayed out of debt

I use my credit card for just about every purchase I make because it’s easier and quicker than cash. Also, I found that using a credit card is safer for me than cash. I find I spend more and more easily when I’m using cash. So though a credit card is my go-to for payments I don’t have any credit card debt. I make sure I spend only what I can afford and pay my bill off in full each month.

Related read: 7 Tips For Paying Off Your Debt Quicker

Except for a car loan which I paid off early I didn’t rack up any other type of debt. When I paid off my car early I had been to save the money that had been going towards car payments for my house down payment. Unfortunately, this didn’t happen due to my move to Florida. Housing is more expensive here so the extra money went toward rent. On the flip side though, by not having the car loan debt my monthly expenses stayed flat instead of increasing.

4. Regularly monitored my budget

By seeing exactly what was coming in and out of my account each week I could make quicker decisions and adjustments to my spending. To track my budget I started with an Excel spreadsheet but soon moved to an online budget management system. The online system allowed me to automate the tracking of my spending and savings by linking my bank accounts and credit cards.

Related read: What Are Sinking Funds And How To Set Them Up

5. Set up a dedicated savings account

To make sure I didn’t touch the money I was saving for my down payment I set up a savings account with an online bank that had a high-interest rate. Having the money in an online bank meant I couldn’t easily touch the money allowing it to grow through regular deposits and compound interest.

6. Made extra money

I could save more money when I made more money. I sold some items online to make a few extra dollars which didn't make a huge difference but did help. If I had really wanted to make some extra cash to put toward my down payment I could have done these things

• Had a yard sale and/or sell things online
• Got a second or even third job
• Temporarily paused retirement and non-retirement investments
• Moved to a cheaper rental
• Do one or more no spend months

How do you save up for a big purchase?