Whether you’ve always dreamed of owning your own home, or are simply tired of renting, saving for the down payment on your first home can seem like a monumental task. This is especially true if you’re paying off student loans, funding a retirement account, or both. It won’t be easy, that’s true, but don’t be discouraged. There are people buying homes every day and you can do it too. The key is to combine saving with other financial strategies that will get you to your goal sooner.

Here are three steps that will help you clear the down payment hurdle and get you on the path to your new home:

Step 1: Begin With a Clear Goal In Mind

Before you can formulate a plan to save for your down payment, you have to know how much you’ll need. Start with how much you can afford to pay each month for your mortgage. The rule of thumb is that your mortgage payment shouldn’t exceed 28% of your gross (before taxes) monthly income. Once you know how much you can afford each month you’ll have a better idea of your home shopping price range. Most lenders love it if you can put 20% down, but there are often lower down payment options available for first-time buyers. This is when a knowledgeable and experienced Realtor is worth their weight in gold because they can help guide you in the right direction.

Step 2: Pay Off Debt

It may seem counterintuitive to put money toward paying off debt when you want to save for your down payment, but doing so will free up a lot of money that you can then put toward your down payment. Going back to the rule of thumb that your monthly mortgage payment shouldn’t exceed 28% of your monthly income, reducing your debt will give you more money to put toward your mortgage. Plus, it will help you secure a better interest rate on your mortgage loan. Some debts will be harder to pay off than others, student loans for example, but things like car loans and credit cards are within your reach.

Step 3: Reducing Your Expenses

You already have money coming in each month. The more of it you can keep the quicker you will reach your goal. You may be surprised how much money you can save when you start paying close attention to your spending. Here are a few ideas to get you started down the path to your dream home:

Stop eating out, or at least limit it to special occasions. Let’s face it, even a cheap fast food meal is around five dollars. Something as simple as taking your lunch to work can save you $100 or more each month.

 Temporarily stop online shopping. The internet has made it all too easy to spend money. Just a click of a button and the money for your down payment is off to Amazon!

Drink coffee at home. It’s delicious, I know, but we all know how expensive coffee is at coffee shops. You could easily save $150 or more a month.

Cut off cable, or subscription apps. You don’t have to go cold turkey on all television entertainment, but reducing how many subscriptions you’re paying for will save a significant amount of money over a year’s time.

Keep your current cell phone. If your current cell phone is working, do you really need the latest $1,000 smart phone? Keep the phone you have and you can save a bundle of money. Same goes for data plans that accompany smart phone ownership. Limit your data usage by utilizing wifi as much as possible, and choose the lowest cost data plans. Keep in mind this doesn’t have to be forever. You’re saving money for your dream home so the sacrifice is worth it.


Buying your first home is a big step. Remember, saving for your down payment is a marathon, not a sprint, so prepare your mindset so that you’re ready to put in the time and make the necessary sacrifices in order to make your dream a reality. Once you have reached your goal, be sure to find an experienced and reputable Realtor to guide you through the process. They will ensure that your interests are represented and protect you from potential pitfalls.

If buying your first home feels overwhelming, break down your goal into action steps like the ones listed here. Implement those steps and before you know it, you will be closing on your dream home!

As a licensed real estate agent and certified money coach, I am here to answer any questions you might have about owning your own house. Send me a message and I will help in any way I can.

Owning your own home is an exciting time in your life and I understand that it comes with many mixed emotions and financial hurdles but I know that you can do it!