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How to Save for a Down Payment on a House in Less than a Year

If you spend far more time browsing through Zillow than you do Instagram, you might have homeowner fever. But if your savings account can't quite buy you a pair of keys to any front door, you might need to come up with a game plan ASAP. The good news? You can rack up enough for a down payment in less than a year.

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Fragment of a nice house.karamysh/Shutterstock

Set a realistic goal

Before you can start stowing away pennies, it’s helpful to have a goal to work toward. And while those multi-million dollar homes definitely have curb appeal, David Rosen, a licensed associate real estate broker, recommends taking a practical approach so you don’t set yourself up for disappointment. Once you understand just how many zeros you need to collect, you can then come up with a weekly and monthly game plan.

Word to the wise: Gerri Sexsion, president and CEO of Jax Federal Credit Union, advises double (and triple) checking just how much you actually need for a down payment on a house. As she explains, many first-time home buyers prescribe to the 20 percent down concept, which isn’t always accurate. “Many people simply don’t know about mortgage products such as FHA loans, which can require as little as 3 percent for a down payment. If you were to purchase a $250,000 home with an FHA loan, the required down payment would be $7,500. Other buyers’ costs, such as closing costs, would likely be around $3,500. That brings the initial investment to approximately $11,000—which is much more manageable than a 20 percent down payment of $50,000,” she says. Though it’s smart to have a candid conversation with a financial advisor before signing on the dotted line, the more info you have, the better prepared you are.

These are the surprising costs first-time home buyers need to know about

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Man hand with pen writing on notebook.Pasuwan/Shutterstock

Create a savings diary

How much money do you spend each month on takeout? What about those indulgent, fancy cold brews? Half-off sales at your favorite department store? If you’re shrugging to these questions, Sexsion says you’re long overdue to start a savings diary. It might seem like a tedious endeavor, but for those hoping to have a home to their name, knowing exactly where your hard-earned dollars are going each month will help you strategize your saving habits. “List every single time you spend money, how much you spent, and what it was for. There’s no judgment here, this is just a listing,” she says. “At the end of the month, evaluate your spending.” Then she suggests a different slew of questions: Could you cut back on your food costs by cooking at home more often? Can you negotiate a lower monthly bill with your cable or Internet provider? Would your monthly grocery bill be lower if you bought more bulk or generic items?

These are the 15 questions everyone should ask themselves before buying their first home.

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Close-up Of A Businessperson's Hand Signing Cheque In OfficeAndrey_Popov/Shutterstock

Automatically move 10 percent of your paycheck to a home fund

“Out of sight, out of mind” doesn’t just refer to that chocolate you’re trying not to eat. Once Uncle Sam has taken his share of your paycheck, have another 10 percent debited automatically and transferred to a dedicated savings account for your down payment on a house as if you never had the funds to begin with. “This removes this money from your ‘spend it’ account, ensuring that no matter what else you’re doing, you’re building up some cash for that down payment,” shares Graham Summers, chief market strategist at Phoenix Capital Research. Don’t miss out on these other simple ways to save money without feeling the pinch.

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FORT LAUDERDALE, FLA/USA - APRIL 10, 2017: Merrill Lynch exterior sign and logo. Merrill Lynch Wealth Management is the wealth management division of Bank of America.Ken Wolter/Shutterstock

Choose an investment account with no bank card

Not sure about what type of account you should open to reap the most reward from your money-conscious habits? Rosen says it’s a smart idea to open an account that has no bank card, meaning you can’t easily withdraw cash when the mood (or the airline deal) strikes. His recommendation is Merrill Edge, an investment brokerage account. It might feel a tad on the dangerous side, but an advisor can help you navigate the best route to earn the most for your short-term savings. “There are risks to investing your savings, but in general, you can work with any of these platforms to attempt to gain an additional return on your savings,” he explains. “They have many charts and interactive features, as well as the ability to segment your savings, all while keeping it away from your impulse spending trigger fingers.”

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Online payment and shopping concept. Cropped shot of African-American male holding cell phone in one hand and credit card in other, making transaction, suing mobile banking app during lunch at cafeWAYHOME studio/Shutterstock

Remove your credit card from online sites

While some people might not be able to walk into a Target without a cart full of items they don’t need, you might not be able to visit their website without “treating yourself, just one more time.” It’s OK—online shopping makes one-glass-too-many buys that seem smart at the moment, but the issue is how much they add up. “A small $20 purchase may not hurt, but a few each month—multiplied over an entire year—can put a serious dent in your savings plan,” Sexison says. “Set better boundaries for buying online to reduce your passive shopping, and increase the amount of money you can put toward your down payment.” The easiest way to begin shifting your one-click frenzies? By removing your credit or debit card info from all of your go-to sites. “The act of having to pull your credit card out of your wallet will force you to slow down. You can also place a sticky note on your card to encourage you to think carefully about every purchase,” she adds.

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A group of Indian people is having lunch

Eat out less often

Warning: The average American spends at least $3,000 a year at restaurants, reports Sanders. And if you live in a trendier suburb or city, that number can double. One challenge you might adopt is one Summers and his wife practice: they only allow themselves to eat meals outside of the home twice a week. They stick to this firmly: even a breakfast sandwich counts! “The other times, we have to prepare the food ourselves. It gives us time together in the house, costs less, and is healthier because we can control what goes into the food. Meanwhile, we’re stocking away the money we would have spent on restaurants/bars. After a few months, it really adds up,” he shares.

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Woman use of the cellphone at outdoor,vintage effect.Mr.Whiskey/Shutterstock

Change the background of your phone to your home

Even if you don’t quite believe in manifesting your destiny, Zach Pelka, the CEO of Paytronage, says one way to focus your attention on your year-long goal is to always have the endgame in mind. This helps you identify the opportunity costs of your purchases, make smarter choices and resist temptation when it strikes in the form of a frappuccino or a new pair of kicks. “Prime your brain by setting whatever that item is that you want as your cell phone background,” he suggests. “Considering most of us check our phones non-stop, this background will be a priming mechanism to evaluate every financial purchase you might make, no matter the size.” When the time comes, be sure to avoid the 11 shockingly common mistakes first-time home buyers make.

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Alushta, Russia - June 8, 2017: Man holding iPad Pro with multinational entertainment company Netflix provides streaming media and video on the screen.Denys Prykhodov/Shutterstock

‘Freeze’ subscriptions you don’t need

From Netflix and Spotify Premium to gym memberships and other monthly bills, Rosen says many people are subscribed to services they rarely use. In addition to your spending diary, consider a usage one, too. If you’re only using Hulu on occasion, why not split the account with a friend to cut back? Or maybe omit it all together? If you can’t get out of these inclusions, he suggests finding a way to pause while you’re saving for your home. “Look into other monthly subscriptions that you can ‘freeze’ or simply cancel if you’re not using. When it’s all laid out in front of us, we realize how much we’re spending a month on extracurriculars, and can often save us a few hundred dollars a month,” he explains.

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mahe Island, seychelles - Romantic cozy hammock in the shadow of the palm on the tropical beach by the seaJenny Sturm/Shutterstock

Skip your vacation or have a staycation

If you want a roof you own over your head, Sexison recommends sticking close to home for a year. Remind yourself that it’s only for a year—Paris, Hawaii, and New York City aren’t going anywhere—and put that extra average $2,300 you spend on airline tickets, hotels, and gas, etc. toward your down payment on a house. If you need some mental health days, she suggests creating the ever-trendy “staycation” that can still help you feel like you’re escaping. “Research free or low-cost activities in your area, such as discounted admission days at local museums; spend a day enjoying nature and pack a picnic lunch; involve the family in a volunteer outing to give back to the community; or visit your local library for new books to read and movies to watch,” she says. “In addition to helping you save toward your goal, this experience can teach children to be resourceful and creative—lessons that will pay dividends in their lives, as well.”

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Dollar banknotes in a glass jar. Finance concept.Yusev/Shutterstock

Apply cost to actions

More of a mental approach than a practical one, Pelka says when you apply a cost to specific actions, you might find yourself stowing away more cash than you ever imagined. What does he mean? Every single time you skip the gym, place $50 in your home savings account. Or when you pick a fight with your partner? Charge yourself $20. “This has been phenomenal as a motivating factor to both go to the gym, but also to save more money anytime that I skip. The trick is making sure that you stay true to it. There are some cool apps out there like Motivatr that require you to pay others if you don’t hit the weights,” he suggests. Read on for the real estate terms you should know before buying a house.

Lindsay Tigar
Lindsay Aurora Tigar is an experienced digital editor and blogger in NYC. Her blog, Confessions of a Love Addict, has a large following around the world, thousands of subscribers and hundreds of thousands of unique visitors a year. A book project based on her blog is under development and represented by theJames Fitzgerald Agency.The New York Post named her New York City's most eligible single in January 2014. She was also selected as one of New York's most desirable singles by the lifestyle dating website, Rachel & Chris, and has partnered with several popular dating blogs to create viral content. She is part of the HerCampus Blogger Network and spoke at their summer conference in New York on "How to Be a Powerhouse Blogger." She's a social media and digital media guru with big followings on Twitter, Facebook and Pinterest.She freelances for several sites, including,,, Engagement 101 and more. She's also the resident dater forWomen', writing weekly about her dating adventures in her 'Dater Diary' column.