How to Save Money For a House

save money for a down payment

Let’s face it, saving your hard-earned money to buy a house is not sexy, or even that easy. This is especially true in this keeping up with the Wantlings culture we live in nowadays.

Societal pressures tell us we need to buy the latest iPhone, 3D TV, or other technological marvel. And we need to buy it before our friends, family, and neighbors manage to get it.

The topic of how to save money for a house is the last thing on many people’s minds. Particularly the younger generation. This is only partially their fault.

Since the Great Recession pulled the proverbial rug out from under our fee, the inflation-adjusted take home pay has declined sharply. The Census Bureau actually has the ammunition to prove this to you.

2013 incomes per household have declined to be 8.7% less than in 1999. It’s not exactly a pretty picture of a recovering economy.

So how can you save enough money to come up with the down payment to buy that dreamed-of home? Saving money makes a lot of sense if your take home pay and total income is greater than your spending needs.

As we saw in the statistics, this isn’t the case for the average American household. This doesn’t make it impossible though. You can realize your goals and achieve this dream with a little hard work and determination.

Here are several good, practical, and actually doable ways (for a change) on how to save money for a house.

Get a side hustle or start a home-based business

how to save money for a home

The problem many of us have with saving isn’t just that our expenses are too high. It’s that your income isn’t high enough. But if you’re spending like crazy, this could be a significant part of the problem, too.

There are only two sides to the equation of savings. X represents your income, while Y equals your spending.

In this algebraic equation of real life, you have to find a way to make X greater than Y. If you don’t, you’ll never get ahead. It might take you forever to save enough for a down payment to buy a house.

I know it sounds like a hard thing to work a side hustle or to start a home-based business on the side. But thanks to technology and the rise of reputable and real work from home jobs, you have no excuses.

Below are some gigs you can do from the comfort of your own home and in your own free time. These side hustles will generate extra income to boost your savings for sure.


You can make some serious side money through writing. There are tons of different types of side hustles you can do with writing, from blogging to transcribing. Here are a few ideas:

  • Pick up a writing gig on Upwork
  • Sell your old term papers through AcaDemon
  • If you type fast, you can be a transcriber with Focus Forward
Photograph & Sell

If you consider yourself somewhat of a photog, use your skills to take photographs and sell them online. Here are a few sites that are currently buying high-quality photography:

All are great options, but do require some additional steps to be able to sell your photos, so do some research. Alamy has become much more popular due to its higher royalties, so that’s something to consider too.


If you’re a teacher or were a whiz kid in school, you can do a lot with your academic mind. Here are some ideas:

  • Tutor someone online through InstaEDU or Chegg Tutors
  • Create standardized test questions for ACT
  • Become a Guide and answer questions for ChaCha

Here’s a video on how Chegg works. Seriously, I wish I had access to this when I was in college…

There are so many online work opportunities now. Almost any talent or ability has a niche website where you can turn your skills into money.

Not just pocket change, either. You can make good, extra, and many times quick-earned cash to supplement your income.

Just make sure this extra money makes its way to your savings account. Not in your “eating out at restaurants” or “trips to Disneyworld” funds.

Start a savings account separate from your checking account

This might sound like a simple and somewhat unnecessary step at first, but think about this fact – your expenses are like a hungry animal. They will always grow to eat all the money you keep in your checking account. You can depend on this simple truth like one of Mr. Murphy’s many annoying (but true) laws.

So open up a savings account where you can sock away all that extra money you’re making from your side hustle. Here’s another important tip – don’t link this new account to your primary checking.

So many of us do this for convenience. We have it linked “in case we need the money” or for overdraft protection. Don’t do it.

All this will do is to transform your separate savings account into an extension of your checking account that’s easy to draw from. In the back of your mind, whenever the money from your primary income is about tapped, you’ll always remember that you’ve got that accessible savings account cushion to draw on with the greatest of linked-up ease to continue your happy spending spree. Trust me on this one.

One thing to note here. Adding another account goes against my theory on cutting your decision fatigue. Make sure you’ve simplified other areas of your financial life before adding another account.

Pay off your highest interest rate debts

The money that you’re paying in interest every month could be going into that new savings account. Combine that with the money you could be making on the side, and you’d be well on your way to saving for that home.

If you have any loans or credit cards picking your pocket with interest, then get rid of them as soon as possible. Look at it this way, even a $5,000 debt at a 25% interest rate is costing you $1,250 per year in interest.

Long-term, work toward paying off everything. But for the sake of saving for a home, start with highest interest rates first.

If you’re having trouble paying off your debt, consider credit counseling first. Check out my guide on credit counseling to help you decide if it’s right for you.

Develop (and actually stick to) your budget

Before I dive into this one, know that this can be a no-budget budget. That’s what I prefer. If you’re curious, check out The Power of Not Budgeting.

But if you haven’t developed any sort of budgeting plan yet, do it now. Going the route of a traditional budget? Just make your spending categories are realistic, not idealistic.

What’s the point to having a budget if you can’t actually live on it?

For instance, it might save you money on paper to only spend $100 per month at the grocery store. But food is essential.

Your family of four probably can’t live on this grocery budget. So just be realistic.

After you create an achievable and livable budget, make sure you stick with it. Otherwise, the savings you’re expecting could get washed away by your spending habits.


If you’re struggling to save money to make that down payment for your house, don’t stress. The truth is that the last few years have been financially hard on many of us across the country.

The stats tell it all. Before the recession hit in 2007, around 40% of those buying existing homes could claim to be first time home buyers. But today that number has declined to around 29%.

Using the steps outline above, you can take control of your finances today. Use these steps to work a little smarter and harder.

Avoid paying crazy interest rates that are robbing you. Save smarter with a savings account you can’t see. And stick to a realistic budget that works for you.

Follow these guidelines, hang in there, and you’ll soon have that money for the down payment on a house.

Here are some other related reads you might enjoy to further your knowledge!

6 thoughts on “How to Save Money For a House

  1. One of the big lessons from this article is that you need to be proactive about finding solutions to your problems (saving money for a house). If you just keep doing the same thing over and over again, you’ll get the same results. You need to find side hustles to supplement your income and then be diligent about saving… or you won’t get there.

  2. We were able to save for a house with some side-hustling (wedding photography, senior portraits, writing), directing all bonuses and gift money to savings, and by cutting expenses by renting room in our friends’ basement. And no–it didn’t ruin our friendship! We ended up purchasing a home on their street a year later.

  3. My husband and I want to buy a house at some point, but not in our current city. I’d say moving to our desired city is a couple years off still, so it’s hard to feel motivated to save for a home when we have very little idea of how much we’ll need for a down payment or what our timeline is.

    We do have a separate savings account with some money saved already, but I think it’s time that we actively add money each month/quarter. As we can live off my husband’s salary alone (with a carefully monitored budget), we’ve been considering using my business income to fund that account, but we need to balance that goal with saving more into our emergency fund as well.

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