You will need to prepare or have already started saving, for a down payment to move from renter to homeowner. A down payment typically consists of three to twenty percent of the overall cost of the house; but, if you're a successful buyer, like the median, it may be as high as nineteen to twenty percent. If you're just starting, it could seem intimidating, but with time and with proper planning, you can find innovative methods to save money. According to a 2022 Zillow analysis, 63% of recent mortgage recipients made at least some use of savings as their down payment.

How much you plan to spend on a down payment will determine exactly how much you save each month; if you're having trouble, don't be afraid to contact a lender. They can assist you in crunching the statistics, and from there, you can figure out how much you'll need to be saved once you've determined an approximate moving date.

It's a terrific start if you already have a set-aside amount for savings each month. Naturally, the more you can save, the quicker you'll be able to pay off your house. Here are 21 suggestions to assist in achieving that.

Make a "new home fund" entry on your wedding registry.

Engaged couples are more likely than ever to request cash contributions from friends and family instead of customary wedding presents. According to research from The Knot, the percentage of couples who include a "home fund" in their wedding register has gone up by 55% in the last five years. About 20% of couples who have registered on The Knot currently have down payment funds; in 2022, they were the second most popular cash fund, only surpassed by the treasured honeymoon fund.

"Marriage empowers couples to customize their registries to their unique aspirations," says The Knot deputy editor and wedding specialist Esther Lee. Even though some guests might rather spend their cash contributions on a celebratory dinner or honeymoon getaway, there's something very unique about a wedding gift assisting the newlyweds in achieving another significant life milestone: becoming homeowners.

As Lee notes, "approaching a down payment registry option requires some additional thought when it comes to etiquette," so keep that in mind if you're thinking about establishing a home fund. This includes letting go of the notion that the down payment will be covered in whole by wedding presents. Furthermore, it is not appropriate for couples to assume that they will get the entire amount of gifts before the wedding.

Choose "new home fund" from The Knot Registry's pre-selected selection of cash funds, or come up with a unique name for your own, to get started. From there, you can include the requested sum and inform visitors of your plans for the donated money in a brief note. Here, clarity is key since it will enable you to achieve your goals. For your loved ones to carefully evaluate their contribution and celebratory present for your future trip, Lee thinks it does well to include the down payment amount on your registry.

"Remember that this is a wedding gift over a simple down payment contribution, which should also help you approach the thank you note process with grace and care," is Lee's advice when it comes to expressing thanks.

Get a side business.

With a side gig, you can find many inventive methods to save and make extra money if you're ready to work a bit more on the weekends or after work. You might consider home-sitting, babysitting, dog walking, or waiting tables. You can even pursue an artistic pastime of selling homemade goods to friends and coworkers or online.

'A side hustle doesn't have to take up a lot of time,' states Bill Promes, a financial advisor with Mill Valley, California's Austin Creek Capital. It's simpler to keep on course when you add a new revenue stream with a clear goal.

Eliminate your car payment and commute to save money on petrol.

If you now commute alone by car, think about your other options. If public transportation is available where you live, that may require using it. If it's not possible, consider bicycling, carpooling, or asking your employer if you may work from home a few days a week. You can transfer those costs to your savings for a down payment on a house when you get creative with your commute.

If you have exceptionally high commuting costs, you might think about finding a position that allows you to work from home or reduce your commute. Having said that, before moving to employment, you might wish to check with your loan officer if you intend to purchase a home within the next two years. A recent change in your profession or a move to self-employment may make it more difficult for you to get a mortgage.

If you have to spend a lot of money every month to pay off your car loan and owning a car is your only alternative, take a close look at your finances. If you have the money, consider using cash to buy a less expensive car. Naturally, a lot of this depends on how dependent you are on your vehicle, and gas mileage is a significant consideration. You don't want to replace your existing car with a more expensive, gas-guzzler.

Additionally, it's critical to ensure that the car you choose won't wind up costing you much more than your prior vehicle. You won't be able to accumulate enough cash for a down payment if you fall into a routine of having your automobile fixed all the time.

When you can, pay off your debt.

If you realize you have extra money in savings or receive a bonus, think about applying it to your debt. Paying off debt with a high annual percentage rate (APR) might help you raise your down payment savings by lowering or eliminating your monthly interest expense, which, considering that you wish to save money for a mortgage, can appear paradoxical.  Your ability to save for a down payment on a house will increase as you pay off more debt.

Think about having a capsule wardrobe.

Performing some spring cleaning is usually a good idea, regardless of the season. You can be motivated to acquire fewer things and just invest in those that you truly need if you set yourself the challenge of maintaining a minimalist wardrobe. In addition, you can clean your home and possibly earn money for your down payment by selling the clothes you no longer wear. Many websites, such as Depop, Poshmark, and ThredUp, can facilitate this process. Alternatively, you might organize a garage or yard sale that may bring in a lot of money, or you could drop off items for sale at a nearby consignment store.

Repair and resale

Consider this inventive method of making and saving money if you have any experience with refurbishing, artistic talent, or interest in the creative arts: restoring used furniture. When you're selling your unwanted items on internet marketplaces, keep an eye out for deals on old furniture that you can paint or reupholster to make it seem nicer and then resell for a profit. You can rely on online tutorials to get you started, even though this isn't one of the simpler ways to make some additional money.

Purchase used rather than new.

Whether you're shopping for furniture or clothing, try to buy used items or sign up for a "Buy Nothing" organization so you may trade items with neighbors. You might be shocked by what you can find for free or at a reduced price, whether you search online or in person at a thrift store.

Avoid purchasing something you don't need.

Do an "edit" of your house, closet, or garage before making any unnecessary purchases to make sure you're not buying anything you already own, don't need, or, in the case of clothing, might not wear frequently enough to warrant. Unsubscribe from email lists and automatic purchases that try to get you to buy items you might not need.

Don't overspend by using the "cash-stuffing" strategy.

Employ the "envelope system," sometimes referred to as "cash-stuffing," as a way to reduce your expenditures. It involves depositing predetermined sums of cash into envelopes labeled with various expenditure categories on the first of the month. This strategy became widespread on social media. You can't spend any more money on a category until the next month once an envelope is empty. Remaining cash? You can either use it as funds for your down payment or carry it over to the following month.

Don't spend your credit card points.

Applying for cash-back rewards credit cards and setting aside that money for a down payment on a home are wise decisions if you're a prudent credit card user.

To find out more about how to take advantage of your credit card benefits, research your credit card programs. Credit card points, for instance, can be converted into airline miles, allowing you to reduce or even completely avoid the cost of flying tickets.

Reduce the amount of trip

Until you believe you have saved enough money for your down payment, cut out any needless travel. Even though it doesn't seem like much fun and can mean skipping a well-earned holiday, reevaluating pointless travel arrangements is a terrific method to reduce expenses and save money. If you want to continue taking vacations, try to find a happy medium ground. Maybe think about traveling for a shorter period, saving money, and paying using credit card points rather than cash.

In 2022, Zillow researchers conducted a buyer survey and found that 41% of potential buyers postponed their vacation plans to save money for a down payment on a home. 

Make use of an automated savings plan and a high-yield savings account.

Consider your savings target as a monthly expense. Establish an automated transfer from your checking account to the savings account you set up for your down payment. Setting aside a portion of your income for savings automatically makes saving money easier and reduces the urge to squander it.

Raise the ante and be inventive in how you choose to save. With greater interest rates than a standard savings account, high-yield savings accounts, bank certificates of deposit (CDs), and certain Treasury bonds can help you turbocharge your money. As money remains in your account, your savings will increase.

"Series I Treasury Bonds are a great place to put some of your cash, especially for a down payment on a house," says Jovan Johnson, co-owner of Piece of Wealth Planning in Decatur, Georgia. "There are some rules to be aware of, though." Furthermore, interest on other kinds of savings may also be subject to state-level taxes. "And, the interest is taxed only at the federal level." That reduces your returns by a further chunk.

Reduce the size of your home.

Downsizing your existing place may help you save more money each month for the down payment on your future house, but it may be a difficult decision. In 2022, Zillow researchers conducted a buyer survey and found that approximately 21% of potential buyers lived in a smaller home than their preferences due to cost concerns. Your savings might mount up faster than you might imagine if you can downsize from a rental house to a smaller rental unit or from a one-bedroom apartment to a studio.

The extra expenses will also decrease. "You can save money on rent and utilities by moving to a smaller apartment," advises Ryan Graves, president of Bemiston Asset Management in St. Louis, Missouri. You can also save money by filling a smaller space with fewer items. It's also much simpler to go from a little space to a larger one when the time comes, filling it up gradually, he added.

Obtain a roommate.

Living alone is an opulent experience, and sharing a place with roommates can significantly reduce living expenses. Rent can be halved by taking on even one more tenant. Consider asking a relative or friend to let you stay with them temporarily in exchange for assisting with housework or other chores if you're truly committed to saving money and feel comfortable with this choice.

Abandon subscriptions

Are twelve distinct streaming services really necessary? Are there any apps or subscriptions that you don't need? Limit your streaming to just one service. About one-third (33%) of respondents to Zillow's 2022 survey of potential homeowners said they had canceled their internet, phone, cable, and streaming subscriptions to save more money for a down payment. These savings can be considerably more achievable than you think.

Check out the resources at your neighborhood library.

Using the wealth of free resources available at libraries can help you save money that you can apply to a down payment. The next time you're in the market for a book, think about checking your local library to see whether they already have it in stock. 

However, some libraries allow cardholders to borrow special things in addition to books. For instance, you can borrow telescopes, tackle boxes, and fishing poles at certain St. Louis Public Library branches. Visit the library in your area. When you learn what they have to offer, you may be shocked.

Reduce your monthly expenses

Budgeting is required for everyday necessities like auto insurance, Internet access, and cell phone bills. Having said that, there are ways to save money on these payments by comparing prices.

"Perhaps your provider doesn't offer many discounts, or you're overpaying for auto insurance," Johnson suggests. To reduce your monthly premium, you might be able to bear a larger deductible for a year or two.

Encourage accountability by becoming a buddy

It's not simple to save, but you don't have to do it by yourself. As you work toward your savings objectives, talking to your partner or a friend helps you feel more accountable. Set up regular time to talk with your pal or partner about your finances. As you work together to identify methods to save money and prepare your monthly budgets, you may support one another. Remember to monitor your development and acknowledge your "victories."

Look for less expensive entertainment options.

While going to a movie on the weekend or to happy hour after work is enjoyable, cutting back on extracurricular activities is a simple method to increase your income. Instead of going out, have a fun movie night at home or invite friends over for a game night.

Frequent dining out can also develop into a costly habit. If you work in an office, try packing a lunch to bring to work instead of purchasing one. Going grocery shopping and making your lunch at home is very reasonably priced. Look out for recipes online for meals that are affordable.

You won't be traveling alone as you try to save lives. A 2022 Zillow study found that 48% of would-be homeowners reduced their recreational spending, such as going out to eat, attending concerts, and watching movies, to put money down for a down payment. Do you want an extra tip for cutting costs? Plan to spend nothing on weekends. Try not to spend a single dime on one weekend a month. How much you can save may surprise you.

Utilize the resources available in the community.

Unbelievably, no matter where you reside, there are free activities nearby. Create a calendar or list of inexpensive or free entertainment options. Having fun doesn't have to cost money. Try going for a stroll with a buddy, playing games at the neighborhood park, or signing up for a free yoga or fitness class.

Don't spend your tax refund.

Spending your tax refund as soon as you receive it can be tempting. But you might want to put money aside for a down payment on a home.

Add the entire amount of any refund you get when you file your income tax returns to your savings. Alternatively, you might apply it to your highest APR debt by making an additional payment. You can receive more interest income the more you save. The more debt you pay off, the less interest you'll pay.

Look into down payment assistance as you save.

Homebuyers may be eligible for down payment assistance programs under certain mortgage types. These programs are typically supported by grants or loans from local governments or nonprofits. For more information, check out the Down Payment Resource Center or speak with your mortgage lender or real estate agent.

Make an appointment to speak with a home mortgage lender and a real estate agent before deciding on a goal savings amount for a down payment on a house.

As you save, keep checking for properties on the internet and updating your lists of requirements, wants, and wishes. It might not take you as long as you think to locate and purchase the house of your dreams.