Wondering how to save money for a house when you’re barely making ends meet as it is?
Buying a house, whether you’re newly married or find yourself suddenly single after 11 years of marriage (which was the case for me), is a monumental milestone!
Regardless of whether you have a down payment of 3%, 5%, or 20%, or you just need to come up with some extra cash for closing costs — all it takes is a little creativity to get there.
I had some money left over from the division of our marital assets, but found myself needing to put another $10,000 aside.
From saving more of the money you already make, to increasing your income with outside-the-box money-making ideas, a little extra effort can help you get into your new home in no time at all.
Don’t get discouraged, if I could actually end up saving money for a house — you can too!
Here are 9 simple ways to start saving for your first home:
#1 – Live Beneath Your Means
One of the most important steps that you can take when considering how to save money for a house is to create a budget and to live by it. Even better — choose to live far below your means.
Here are some things you can do to live beneath your means:
- Live in an apartment or rental home that costs less money than what you can actually afford.
- Drive an older model car or consider alternative transportation methods.
- Adjust your insurance if you aren’t using your car to commute.
- Cancel your cable service and try an online streaming service like Hulu or Netflix.
The more money you can find in your budget to save regularly, the easier it will be to reach your new house goal.
Plus, when you live beneath your means, you’ll have access to more money to save each month and you won’t be wondering how to save money for a house anymore.
Here are some excellent ways to set a personal budget.
#2 – Make Savings Automatic
Another simple way to save money for a house is to make your savings automatic. This means that you set up regular savings account transfers that draft money into your account.
Some people do this weekly. Others do it the day after they get paid.
You can take it a step farther and ask your employer to split the direct deposit of your paycheck between your checking and saving accounts! Many times, you can choose how much you want to go into each account. When you do this, you’re taking the effort out of saving, and your account balance will grow with no effort required on your part.
Learn more about how to split your direct deposits.
#3 – Go On A Spending Diet
Put yourself on a 30-day spending diet. For one month, drastically limit your spending to only essential purchases — things you really need (not things you simply want).
Every week, deposit the money you’ve saved on clothing, dining out, or new gadgets into your savings account.
Just like a real diet, seeing the results of your discipline each week can encourage you to keep up your new, good (spending) habits.
At the end of the month, see what areas of your budget you’re willing to slash to maintain your new, “slimmed down” spending habits and keep your savings growing.
If you’re considering how to save money for a house, trust me — this is a fantastic and motivating way to put money aside. Then, I would encourage you to try to keep this practice in place once you move into your new home!
#4 – Pay With Cash
When you make purchases with a credit card, you’re paying more for the item when you include the card’s interest rate — if you don’t pay off your credit card balance in full each month.
Depending on the interest rate on that card, you could be paying 12% to 30% more than the cash price for that same item.
In my case, I don’t like carrying cash and I use my debit card (for even the tiniest purchases) all the time. Even though this money comes right out of my checking account — and is like cash — for some reason it’s easier for me to get carried away with my spending this way. There’s something about actually handing over green bills that makes a greater impact on me and keeps me from spending on so many little things.
The lesson here is: resist the urge to make purchases with your credit card, and only buy something when you have the cash for it.
Here’s more about the psychology of paying cash vs using a card.
#5 – Make Money Online
Personally, I needed every penny that I could pull together and found that online work was the best way to save money for a house — at least for me.
In another article, I shared some of my best tips for making money online.
A few hours online on the weekend could help you earn some extra cash… fast!
Here are some other great ways to make money online from home.
#6 – Leverage Your Social Network
Do you have a strong social media presence? If so, engage your followers — and make some money!
Sites like Wingsplay will pay you to share videos on Facebook, Twitter, or your blog.
Wingsplay, a startup that launched last month, pays its users to share video ads on their social networks. The distribution model is key. It relies heavily on connected social networks. The founder, Olivier Lasry, says the best way for online advertisements to resonate with people is if a link has been recommended by a friend or social media connection. Source
Then, every time one of your followers watches the video you’ve shared, you get paid.
Here are 6 other ways to make money with social media.
#7 – Sell Your Photos
I bet you’ve never thought about your photography hobby when wondering how to save money for a house. Am I right?
Well, this is actually a great way to save money. Pick your best photos and turn them into money by selling them on microstock websites.
The term “microstock” refers to the micro-payments the sites charge customers for the use of those images — those payments are then passed on to the photographers who shot the images.
If you love taking pictures, sign up and get paid every time one of your images is downloaded.
Here’s how to get started making money selling photography.
#8 – Sell Your Stuff
You know what they say — one man’s junk really can be another’s treasure. Maybe it’s time to get rid of the unwanted or unneeded items you have collecting dust and start saving money for a house!
You can even sell unused gift cards for some extra cash.
#9 – Save Bonuses And Gifts
If you’re like some lucky people out there, you may receive financial windfalls from time to time throughout the year. (Side note: good for you! I have yet to receive a “financial windfall.”)
This may come in the form of birthday gifts, holiday gifts, or wedding gifts. It may also come in the form of a bonus at work or even an IRS tax refund.
When you receive these larger sums of money, invest them into your savings account. This will help your account balance to grow much more quickly — which makes saving money for a house much easier!
The bottom line: it may still take several years of actively saving money for a house to reach your goal — but if you use these tips, you’ll get there faster.
Like I said, if I can do it (… and I did!), then you can too.
More About The Best Way To Save For A House
In addition to the links I’ve included above, here are some more resources that will help when you’re saving money for a house:
- Helpful Loan Programs For First-Time Home Buyers
- Top Things To Know Before You Buy A Home
- 6 Things To Know Before Buying A Home Warranty
- Buy A Home Or Rent: What You Need To Know
- How Long Does It Take To Buy A House?