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I am going to tell you exactly how to save money for a house.

You may be wondering how I could possibly know how to save money for a down payment on a house?

Fair enough.

My husband (then fiance) and I saved up $30,000 quickly in less than one year to pay off debt and pay $7,000 toward a house down payment.

Without going into too much detail (because this about you, not about me), I simply want to say that saving money for a house is easy once you set your goals, make an achievable plan and execute it.

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save for a house

How to Save Money for a House

Let’s not waste any time. Here’s how to save money for a house in 6 months (based on my own personal experience).

1. Set a Realistic Goal

Before doing anything, you need to know how much to save for your house down payment. It could be $5,000 or it could be $25,000 (or more). This varies for everyone and depends entirely on your income.

There are certain things you need to do in order to set your goal. Let’s do those now.

Get An Idea of How Much House You Can Afford

Bankrate’s saving for a house calculator was my best friend during the initial “we think we’re ready to buy a house” stage. You know. The stage where all you want to do is crunch numbers and calculate just how possible it is to save money for a house.

House down payment calculators are kind of addicting (don’t say I didn’t warn you).

Get Pre-Qualified for a Mortgage

You’ll need to be pre-qualified for a mortgage before you can know exactly how much house you can afford. A mortgage pre-qualification will account for your debt to income ratio, your existing assets and your credit score. This is the “non-official” step that most realtors require before even showing you a home.

With the internet at the tip of our fingers, getting a mortgage pre-qualification is so easy. You can do it all online now through a reputable mortgage lender like Quicken Loans.

Know Your Mortgage Options

You’ll want to discuss with your realtor (or research online) the different mortgage options available to you. In the US there are four types of mortgages to consider.

  1. Conventional Loan – non government loan.
  2. FHA Loan (Federal Housing Administration) – insured by the federal government.
  3. VA Loan – insured by the federal government for military service members.
  4. USDA / RHS Loans – income based funding for rural, low to medium income families.

Set Your House Savings Goal

Once you know exactly how much house you can afford and with it the down payment amount, you can set your house savings goal.

Remember, you’re not saving for the entire total of the house, but instead for the down payment, which typically includes your first year of taxes, insurance and closing fees.

So for example, our mortgage payment calculated out to $1,000 down on the loan, $2,600 in first year taxes, $800 on insurance and another $2,600 in closing fees. These numbers will vary greatly based on the price of your home and your location.

how to save money for a house

2. Make a Plan to Reach Your Goal

Setting your goal is only the first step to saving money for a house down payment. It’s equally important (if not more important) to draft a plan to save your goal amount within a given amount of time.

If your down payment amount will be $12,000 and you’ve given yourself 12 months to reach this goal, you know that you need to set aside $1,000 each month for the next year.

Open a high yield savings account that is dedicated to your house savings. Automatically transfer $1,000 to the savings account once a month, $500 two times per month or $250 each week until you’ve reached your goal. In the meantime, your liquid funds will earn a generous bit of interest (compared to the market rate of .09%).

If your money is “out of site and out of mind” you’re much more likely to meet your goal in the allotted time.

3. Save Money On All Purchases

Now that your goal is set and a savings plan is in place, you can start saving for a house. There are many ways to do this, but let’s start with the obvious.

Get Cash Back On Most Online Purchases

Signup for Ebates and start earning cash back on many of your online purchases. If you shop for necessities (or even luxuries) online, then you should always be racking up your savings on the purchases you already make. Learn how Ebates works and how we saved money using Ebates right away.

Maximize Your Credit Card Points

In order to maximize credit card points that can be used toward future purchases, you first need to be committed to paying off your balance every single month. If you use credit cards for credit, then this way to save money for a house fast will not work for you (it will actually hurt you).

Use Discounted Gift Cards for Everything

A little known trick to save money on tons of everyday purchases is by purchasing discounted gift cards from Raise and using them for necessities. Store availability varies, but you can set up alerts for your favorite gift cards to stores that you patronize often.

Hey, you can even stack your savings here by purchasing discounted Raise gift cards with your credit card (earning you points) and then turn around to use your gift card online through Ebates (earning you cash back). And don’t forget the discount you earned by using Raise!

If this is confusing, don’t worry. I talk all about stacking discounts online here.

4. Pay Your Bills Yearly

Now don’t run off just yet. Paying bills on a yearly schedule is not as difficult as you think. It just takes a little extra budgeting and research to see which bills can be lowered by paying them yearly.

Research Your Potential Savings

Contact all of your utilities, streaming services, TV and internet providers, insurance companies and other bill companies to ask if they offer discounts for making larger payments.

For example, my local PO box has the option to be billed monthly, bi-yearly or yearly. The longer I reserve and pay for my PO box ahead of time, the more I save in the long run. Do this for every bill possible and the savings add up.

Stagger Your Yearly Bill Schedule

Of course, committing to larger payments can be difficult at first. Most companies will work with you to set the recurring bill date to match your fund availability.

Calculate all of your yearly bills and mix/match them to balance out your yearly payment schedule. For example, pay the yearly cable bill in January, internet in February, phone bill in March and so on.

Only negotiate a yearly (or bi-yearly) payment with companies who will extend a discount. This will help you save money for a house down payment quicker than paying your regular monthly bills.

saving for a house calculator

5. Give Up Extra Luxuries

It might be a given, but it’s worth mentioning. If saving money for a house is important to you, then you need to be willing to give up a few things.

Here are some ideas that you can avoid in order to save money for a down payment quickly.

  1. Eating out
  2. Movies
  3. Streaming services
  4. TV services
  5. Gym memberships and personal trainers (but still workout at home!)
  6. Unneeded “wants” from the store
  7. Coffee on the run

What can you do to while saving for a house?

  1. Movies at home
  2. Dinners at home
  3. Pack your lunches
  4. Watch local channels
  5. Choose one streaming service (not 3!)
  6. Make your own coffee at home

6. Budget Every Penny

It sounds annoying, but budgeting your income and expenses and knowing where every penny goes brings many frivolous spending habits to light.

Watch your bank and credit card statements closely and work on eliminating even the smallest unnecessary purchases. This will help you create good spending habits.

I live to use to keep track of our income and expenses. You can even manually record cash payments to keep track of everything in one place.

7. Make Extra Money In Your Spare Time

Sometimes you can do everything right, but at the end of the day, unforeseen events take precedence over saving money for a house.

For example, my husband hit a deer last week and now we need to pay a $500 deductible in order to have the damage fixed. Though it never feels like a good time to steak a claim on your insurance company, it’s nice knowing that you have that safety net should that time come.

That said, go beyond the everyday ways to save money for a house and proactively earn money toward a home.

Ways to Make Money for Your House Fund

  1. Pick up overtime at work.
  2. Babysit your friends’ kids, pets or house.
  3. Rent out your home on Airbnb.
  4. Transcribe for companies.
  5. Write for online publications.
  6. Sell your used clothing and items online.
  7. Flip flea market finds.

How to Save for a Downpayment on a House Fast

Ultimately it is up to your to save for a downpayment on a house fast. These tips only scratch the surface when considering all the possible ways to save money for a house.

Above all, your goal is to change your mindset to live frugally and spend your money intentionally. Once you’ve established and committed to your goals, anything is possible.

Whether you have 5 years, 2 years or 6 months to save money for a house, it’s never too early to start saving now.

saving for a house

save money for a house in 6 months

I created The Pay At Home Parent in February of 2018 to help you be a successful home-based business owner, blogger or side hustler. As a wife, mom and frugal homemaker, I still make a full-time income on a part-time work schedule and I know that you can too!

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