It’s not any secret that my husband and I are vying to be homeowners. Home ownership has always been a goal of ours, but it has often taken the back burner to more pressing things, like graduate school, job training requirements, and paying down the last $14,000 of our student loan debt.
We’ve been able to get through most of these financial hurdles by downsizing and also building up a side hustle income, such as freelancing, that has allowed us to pay down debt and save.
But now, we’ve added another financial priority: a house down payment. For the longest time, the idea of home ownership remained just a dream that we used to talk about with the phrases “Some day…” and “If only…” This year, we finally got the crazy idea to stop waiting until we paid off our debt and just start saving now.
We didn’t really have a plan in place, and our savings strategy for a house down payment had a “Let’s see what we can do” approach.
In March, when we decided to truly make a house down payment a priority, we had about $3,000 in our savings account. On June 1st, we will have $10,000 in our savings.
That’s an increase of $7,000 in a period of less than four months. While it’s nowhere near what we need for a substantial down payment, it at least helps keep us motivated to continue to save and increase our fund.
So, how did we make it happen? Essentially, we used the same strategy for paying down debt as we do for saving for a house down payment. Here are the how-to’s on saving for a house down payment:
Make it a priority. With automatic deposit, $500 from our checks is automatically entered into our house down payment fund every paycheck. This contributes a savings of $1000 a month automatically. Having the money automatically taken from our checks and deposited into a separate savings account helps us forget about the money and not rely on it. We didn’t just go from 0 to $1000 in one month. We started off with smaller savings amounts first, and increased it little by little until we got to the point where we felt we could live without an extra $1,000 a month.
Work more. The $1,000 every month is the minimum we save. In order to save more, we have to make more. My side hustle income is already earmarked for debt repayment (we still have $14,000 in student loans), graduate school payments and travel (hey, you have to live a little!), so we don’t touch that money. In order to make more money, we have to work more at our day to day jobs. We decided that any extra income we earned would also go directly into our house down payment fund. We know the amount of money we need to live off comfortably, so if we earn more money through overtime, we don’t get to spend that on whatever we want. Instead, we contribute it to our house down payment fund.
Contribute everything extra to the fund. Every penny that has been earned in addition to our day to day jobs has gone into the down payment fund. We received a tax refund of $2,000 that was deposited into our house down payment fund. Rebate checks, mileage reimbursements, etc., has all gone into the fund.
We are so excited that we have made such a significant amount of progress in such a short period of time and it motivates us to keep on saving.