Dreaming of owning your first home but feeling overwhelmed by the savings process? You’re not alone! Saving for a home can seem like a huge challenge, but what if I told you there’s a simple way to break it down and make it achievable?
Whether you’re just starting or looking to speed things up, I’ve got you covered with practical, proven strategies to help you reach your goal faster.
Step 1: Understand Your Target Savings Goal
Before you start setting aside money, you need to have a solid goal. Imagine trying to save for a vacation without knowing where you’re going or how much it’ll cost—sounds stressful, right? The same goes for buying a home. Let’s figure out your target savings number step by step.
Three Main Costs to Plan For:
- Down Payment – This is usually the biggest chunk. Depending on your loan type, you may need anywhere from 3% to 20% of the home’s purchase price. For example, if you’re considering a $250,000 home and using an FHA loan with a 3.5% down payment, you’ll need $8,750.
- Closing Costs – These include lender fees, title insurance, and more, typically ranging from 2% to 5% of the home price. That’s $5,000 to $10,000 for a $250,000 home.
- Emergency Fund – Many people overlook this! You don’t want to move into your home with an empty savings account. Setting aside at least $5,000 ensures you’re financially secure after closing.
Total estimated savings goal for a $250,000 home: $14,000 to $19,000 (varies based on location and lender requirements).
Step 2: Create a Realistic Budget
Saving for a home won’t happen by accident—you need a plan! Think of a budget as a roadmap to guide you toward your goal.
Budgeting Tips:
- Track Your Income & Expenses – Write down everything you earn and spend. Apps like YNAB (You Need A Budget) or Honeydue (for couples) can help.
- Find Areas to Cut Back – Reduce unnecessary spending, such as:
- Cooking at home instead of dining out
- Canceling unused subscriptions
- Shopping more intentionally
- Set a Monthly Home Savings Goal – Treat your savings like a bill. Automate transfers into a dedicated savings account.
Example Budget for a $4,000 Monthly Income:
- Rent & Utilities: $1,500
- Groceries: $400
- Transportation: $300
- Entertainment & Dining Out: $200
- Debt Payments: $500
- Other Expenses: $500
- Home Savings Goal: $600+
Step 3: Reduce Unnecessary Expenses
You don’t have to sacrifice everything fun—just make smart spending choices!
- Cook More at Home – Even one fewer restaurant meal per week can save hundreds per month.
- Cancel Unused Subscriptions – Audit your streaming, gym, and magazine subscriptions.
- Shop Smarter – Buy in bulk, use cashback apps, and avoid grocery shopping when hungry.
- Curb Impulse Purchases – Use a 24-hour rule for non-essential buys.
Cutting just $50 a week in unnecessary spending could add $2,500+ per year to your home savings!
Step 4: Boost Your Income
Cutting back is great, but there’s a limit. Increasing your income, however, has unlimited potential!
Ways to Make Extra Money:
- Take on a Side Gig – Freelance on Fiverr, tutor online, or pet sit.
- Pick Up a Part-Time Job – Even 10-15 hours per week can add hundreds to your savings.
- Sell Unused Items – Sell clothes, electronics, or furniture on Facebook Marketplace or eBay.
- Monetize a Hobby – Turn baking, crafting, or photography into a side hustle.
Pro Tip: Set up a separate savings account for your extra income so you don’t spend it unintentionally.
Step 5: Automate Your Savings
Ever meant to save but somehow spent the money instead? Automate it!
How to Set Up Automatic Savings:
- Open a Dedicated Home Savings Account – Keep it separate to avoid temptation.
- Set Up Automatic Transfers – Every payday, move a portion of your check to your home fund.
- Use Banking Tools & Apps – Apps like Chime or Acorns round up your purchases and save the change.
Step 6: Stay Motivated & Track Progress
Saving for a home takes time, so staying motivated is key!
- Write Down Your ‘Why’ – Financial security? More space? A place that’s truly yours?
- Create a Vision Board – Include home styles, dream kitchens, or your ideal neighborhood.
- Celebrate Small Wins – Reward yourself when you hit savings milestones!
Saving for your first home is a journey, but every step brings you closer to your goal. It’s not about perfection—it’s about progress!
If you’re serious about making homeownership a reality, schedule a free planning session with me! Your dream home is closer than you think—let’s make it happen!
FTC Disclaimer: This is not a sponsored video or article. All opinions are genuinely my own. This post also contains affiliate links and I earn a small commission if you make a purchase after clicking on my links. It does not cost you any extra. Thank you for your continued support to keep the Bri Callis Blog going!
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