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How to Boost Your Savings and Buy a Home

It’s easy to get excited about buying a home. But saving up the money for it? That’s a different story.

Dave has clear guidelines for buying a home: You should put at least 10–20% down on a 15-year fixed-rate mortgage. Piling up that kind of cash can feel like a mountain you’ll never conquer. But people just like you do it every day.

So before you start touring homes with a real estate pro, make sure you’re ready. We asked Dave’s Facebook fans to share their top tips for building a big down payment. Here’s what worked for them.

Keep Your Snowball Rolling

If you’ve completed the first three Baby Steps, you already know how to put your money to work for you. You’ve knocked out debt and built your emergency fund. Now you’re ready to invest 15% of your income for retirement.

But before you proceed to Baby Step 4, why not use that chunk of cash to build your down payment? It’s okay to put retirement savings on hold for a short period of time to save for a home. Dave calls this Baby Step 3b.

Worried about affording a house? Our free Home Buyers Guide will help.

That’s how Cyndi L. funded her down payment. “I continued my snowball! That money I had budgeted monthly started going into a special higher interest savings account,” she says.

Work Twice as Hard, Live Half as Large

Many Dave fans rolled up their sleeves and put in extra hours to beef up their down payment fund.

Working six to seven days a week between two hotel jobs wasn’t easy, but Kendt B. stashed away tons of cash in the process. And he didn’t stop there. Kendt traded single living for a roommate, adding an extra $500 to his stockpile each month.

Of course, one person doesn’t always have to do the work of two. Just ask Sarah C. She and her husband piled up $38,000 in cash in one year. Her secret? “We lived on my husband’s income and saved mine,” she says.

Let’s say you and your spouse each bring home $3,000 a month for a total of $6,000. If you saved one of those paychecks every month for 18 months, you’d have $54,000 in the bank. That’s enough to put 20% down on a $270,000 home!

Find Creative Ways to Ditch Rent

Rising rents are making it hard for many to afford the American Dream. So think outside of the box and look for ways to give rent the old heave-ho. Creativity paid off in spades for these folks.

  • Kim V. and her husband managed a couple of San Diego apartment complexes. “We socked away every payment we earned from my husband’s handyman work and made a small stipend plus free rent.”
  • Teri S. housesat for an older couple who traveled a lot. No rent meant she could pay cash for a car and stockpile more than 20% for a down payment.
  • Looking for a career change? Get creative and consider jobs that might offer housing perks. Mary G. cut out rent by living above the funeral home she worked for.

Shrink Your Space

You might not have the option of eliminating rent altogether. But you can still find ways to cut it down to size.

For instance, many couples spring for a two-bedroom apartment to make room for “his and hers” stuff. But renting the “tiniest duplex in the world” enabled Bethany C. and her husband to live off his income and sock hers away. By the time kids arrived on the scene, they had enough cash for a large down payment on a bigger home.

Can downsizing really make a difference? If you save an extra $200 on your rent check each month, you could throw nearly $5,000 more toward your down payment over two years.

Focus on the Future

Money’s not the only factor at play. You need motivation to keep you moving toward your goal. These super-savers stayed focused with the power of visuals.

  • Cara H. created a chart with different colors for every line saved and encouraging Bible verses at the top.
  • Helen P. hung a dream board in her living room to inspire her family toward their savings goal.
  • As a single mom, Sasha L. scrimped and saved to put 10% down on her home. When the going got tough, she imagined just how great her new place would be.

When You’re Ready to Buy . . .

Saving for a home isn’t easy. You’ve worked hard to make smart choices with your money and don’t want to end up with a bad investment.

That’s why it’s important to partner with an experienced buyer’s agent. A buyer’s agent acts as your own personal advocate to get you the best deal on the home you love. Look for a pro who doesn’t rush through paperwork to close a deal. A good agent knows clarity paves the way for a confident purchase.

Want a pro who will give you the same advice you’d hear from Dave? Try one of Dave’s real estate Endorsed Local Providers (ELPs). Your ELP knows how hard you’ve worked to take control of your money, and they will fight for your best interests every step of the way. Find your ELP today!

Ramsey Solutions

About the author

Ramsey Solutions

Ramsey Solutions has been committed to helping people regain control of their money, build wealth, grow their leadership skills, and enhance their lives through personal development since 1992. Millions of people have used our financial advice through 22 books (including 12 national bestsellers) published by Ramsey Press, as well as two syndicated radio shows and 10 podcasts, which have over 17 million weekly listeners.

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