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Updated: February 26, 2015

8 surefire ways to save for a home down payment

Planning to buy a house but having a hard time raising the down payment? Here are a few simple but effective methods of putting together that 20%.


Renting forever isn’t something that appeals to everyone. At some point, people still want a place they can fully personalize, raise a family in, and retire to, basically something to call their own. But if you’re not earning a lot, do you need to keep putting your dream on hold? Not necessarily. Banks are making it easier for you to apply for a home loan, which is immediately a load off your mind. But what about that first major expense: the down payment?

A good rule of thumb when coming up with a down payment is 20% for most cases, but it’s still a hefty amount if you don’t have the paycheck of a celebrity or a CEO. Here are 8 tips for putting away enough money to finally make your dream of homeownership come true.

1. Create a monthly budget
Seeing what you spend on and how much you spend on it every month is an easy way to keep track of your expenses. It’ll give you a better idea of where you can scrimp a little more without coming up short on the more important things. Once you have a new, downgraded budget, try your best to stick to it so you save as much money as possible.

2. Cut down on your spending
Expenses that seem small now can add up in the long run, so scaling back on your morning latte runs and nightly restaurant dinners in favor of home preparations will do wonders in boosting your funds. Downgrade your cable plan by sacrificing a few channels. Cancel the gym membership you barely use and exercise at home. This isn’t to say you’re not allowed to enjoy yourself at all; you just need to spend less whenever you can. For instance, instead of flying out of the country for your yearly summer vacation, why not travel by bus to a Philippine destination you haven’t gone to before? You’ll have the same amount of fun for way less money.

3. Move to a cheaper rental
If you’re living in a two-bedroom home right now and you’re not really using the other bedroom, downgrade to a one-bedroom apartment. Or even a studio-type unit, if you can get by with the limited space. If you can't break your lease, talk to your landlord about getting a housemate who’ll split the costs with you.

4. Hold a yard/online sale
Anything you think you don’t need anymore – clothes, appliances, kitchen ware, you name it – put a price tag on it and let it go. Aside from earning money, it’ll give you more floor space if you do decide to move to a smaller place. When you’re done purging your home of sellable things, go to your family and friends and find out if they’re willing to donate any items they don’t need anymore that you can sell and keep the profits for.

5. Sell your vehicle
Think you can get by without a car for a while? Aside from getting a hefty sum you can use to buy a house, you’re also freeing yourself of financial obligations that come with owning a vehicle, like gas money and maintenance work. Once you’re financially comfortable again, you can look into getting another vehicle.

6. Ask family and friends for help
This doesn’t mean asking for handouts, if you’re too proud to beg. But if you’re getting married soon, or if you have a birthday coming up and people ask you what you want, tell them a monetary gift will do nicely because you’re saving up for a house. These days, requesting cash as a gift (when you’re asked, that is) is no longer really tacky, it’s just practical.

7. Get a sideline
Are you skilled with that DSLR you’ve been playing with for years? Are you an avid blogger who writes about anything? Why not get paying gigs with your skills? If you think you don’t have the time for a second full-time job, that’s OK. Getting paid per-project would be a big help, so start by asking friends and family if they know of any freelance jobs or by looking for ones online.

8. Save less for retirement
Got a special fund you’re religiously adding to for your golden years? Why not lessen the amount you’re putting in there? This would make sense especially if part of your spending plans when you hit 65 is to buy a home where you can retire anyway.

If you’re serious about saving up for that property, here’s a fair warning: it’s going to require quite a sacrifice, but don’t all major decisions require some compromise? Before you know it, the keys to your new home will be in your hands.


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