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10 Budgeting Tips To Save For Your First House

  • March 30, 2020

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10 Budgeting Tips to Save For Your First House

Saving for that first house usually takes a lot of hard work and effort. After all, most experts recommend putting 20% down, which means $60,000 on a $300,000 home, no small chunk of change. While many do put a lot less down (over half made a down payment worth 6% or less of the home value according to a 2018 report from the National Association of Realtors), it's still going to be a significant amount of money no matter how you look at it. And, the down payment is only one part of the many steps to buy a house - there are closing costs and other fees too.

While that may all sound daunting, these budgeting tips can help make it easier for you to save the money you need to buy your first house.

Use the Envelope Method

Avoid using your debit card and use cash instead by taking advantage of the envelope method. What you'll do is cash your check and divide it into envelopes based on amounts allotted for things like groceries, gas, and other expenses. This way, you'll be able to see exactly what you're spending and what you have left. Once the envelope is empty you'll have to wait until your next paycheck before spending in that category.

Related to budgeting tips to save for your first house:

Trim Monthly Expenses

Take a close look at monthly expenses to determine where you can cut back. Are you paying for anything you don't really need? From unused gym memberships to magazine subscriptions, there's probably something you can easily do without. 

Always Pay Yourself First 

One of the most tried-and-true methods is to be sure you pay yourself before anything else. Don't just save whatever you have left at the end of the month or pay period. Save first, ideally having the money automatically deducted from your check into a savings account. If you save first and live off the remainder you'll have a much better chance of achieving your goal quicker.

Make Your Coffee at Home

Americans tend to spend a lot on coffee, picking up a cup of Starbucks or another fancy type every morning on the way to work. But you can save quite a bit simply by making coffee from home- an average of $1,100 per year.  

Save All Your Change 

Whenever you've given coins in change, throw it into a jar or another type of container. You'll be surprised at how quickly it adds up while causing little financial pain. You won't even really notice it missing, but that 31 cents or what have you will eventually turn into hundreds of dollars with time.

Eliminate Your Car Payment

Are you making payments on an expensive car? Could you get by without a car, or at least a cheaper one? If so, consider selling it to cut that major expense. Using public transportation you'd save on fuel costs, maintenance and repairs, insurance, registration, and that big monthly payment. Even if that's not an option, a used car can still help you save more so that you can buy that first home faster.

Have a Yard Sale

How much stuff do you have that you aren't using? You probably have a lot more than you realize and selling it could add a significant amount to your savings. You could hold a yard sale or garage sale, sell items on eBay, Craigslist, etc. One man's (or woman's) junk is another's treasure. Think everything from clothing to electronics and household decor - go through everything you have and take time to consider if it's something you really need - what's more important, getting into a new home or that second TV you never use?

Rent a Room

An extra room in your house could earn you big bucks that could go towards your savings. If you don't want a permanent roommate, consider renting it via Airbnb on a per night basis.

Save at the Grocery Store by Shopping With a List 

Never go to the grocery store without a list. Budget carefully for only what you need by planning recipes for the week and stick to it. Avoid the temptation to toss unnecessary items into your cart.

Save on Electric Bills 

In the wintertime, keep the heat turned down and use blankets and sweaters instead. In the summer, try to avoid using air conditioning as much as you possibly can. Both will help you save a lot on those electric bills.