Saving for Your First Home? These Tips May Ease the Process

So, you’ve decided to take the leap into homeownership. First off—congrats! That’s a huge milestone, and while it may feel a little terrifying, it’s also incredibly exciting. But if the thought of saving tens of thousands of dollars for a down payment makes your stomach churn, you’re not alone. For many first-time buyers, that looming price tag is the biggest barrier between renting and owning.

The good news? It doesn’t have to feel impossible. In fact, with the right plan, a few mindset shifts, and some less-talked-about strategies, saving for your first down payment can actually feel... doable.

Whether you're months into your savings journey or just now looking at your bank account wondering where to start, this guide is here to help.

First—Know What You’re Really Saving For

Before you even begin saving, you need a clear number in mind. “Saving for a down payment” is one of those vague goals that sounds responsible but lacks teeth unless it’s tied to specifics.

• Get to know your market: A 20% down payment in San Francisco is very different from 20% in Des Moines. Research median home prices in the areas you're interested in. Be honest about the size and type of home you're likely to buy.
• Don’t assume 20% is required: While putting 20% down can help you avoid private mortgage insurance (PMI), many first-time buyers qualify for loans with as little as 3% down. FHA loans, for example, require just 3.5% down, and some conventional loans offer low-down-payment options too.

The average down payment for first-time homebuyers in 2024 is around 9%, according to Bankrate. Some loan programs even allow you to put down as little as 3%!

Once you’ve set a target number based on your area and loan type, break it down into a monthly goal. If you need $24,000 in two years, that’s $1,000 per month. It may sound steep, but clarity makes the process way less intimidating.

Design a System, Not Just a Budget

We often hear, “Just budget better,” as if that’s the cure-all. But here’s a slightly radical thought: Don’t start with a budget. Start with a system.

Think of this as creating a financial autopilot. Budgeting tends to be reactive—tracking what already happened. Systems, on the other hand, help control what will happen. And they work even when life gets chaotic.

Here’s what that can look like:

• Pay yourself first: Set up automatic transfers that move a fixed amount to your down payment fund the moment your paycheck hits. Treat it like a bill—non-negotiable.
• Open a high-yield savings account: Your money should be working just as hard as you are. Look for accounts offering 4% or more (as of early 2025, some are hitting even higher).
• Name your savings goal: Label the account something inspiring like “Future Home” or “Escape Renting 2026.” That psychological cue can subtly reinforce your purpose.
• Use a side account for variable expenses: Lumping all your money into one account often leads to overspending. Use separate “buckets” for things like vacations, gifts, or car repairs, so those don't derail your savings momentum.

Small systems add up over time. And perhaps more importantly, they reduce the number of decisions you have to make—meaning less financial fatigue.

Make Strategic Lifestyle Tweaks

Let’s be honest: no one wants to give up every joy in life just to hit a financial goal. But what if saving didn’t have to mean living like a monk?

Here’s where creativity comes in.

Rethink your big expenses first

These are the ones that move the needle most:

• Housing: Can you house hack? This might mean renting out a spare room or switching to a more affordable place short-term to free up cash.
• Transportation: If you're paying $600/month on a car loan, ask yourself if a temporary downgrade could save you $5,000–$10,000 over two years.
• Subscriptions and memberships: Audit everything. You don’t have to go full minimalist, but if you’re barely using that $90/month fitness studio or five streaming services, that’s money that could go toward your future home.

And don’t forget the non-obvious cuts:

• Delayed gratification swaps: Instead of giving up dining out, set a rule—only eat out if it’s a social event. Solo dinners? Cook at home. It's a compromise that still lets you enjoy your social life.
• Lifestyle ‘delays’ vs. ‘denials’: You don’t have to swear off vacations entirely. Just plan lower-cost getaways for a year or two (hello, road trips) or use rewards points creatively.

Boost Your Income in Intentional Ways

Now, let’s flip the script. While most advice focuses on cutting back, one of the most powerful ways to accelerate your down payment savings is to simply earn more—and funnel it intentionally.

Now, I know what you're thinking: “Easier said than done.” But the goal here isn’t to work 80-hour weeks. It’s to be strategic about additional income that doesn’t derail your life.

Here are some methods that worked surprisingly well for me and others:

• Freelance or gig work in small bursts: I once picked up weekend freelance writing gigs for three months. Just two articles a week brought in an extra $600/month, which went straight to my down payment fund.
• Turn your stuff into cash: One friend made $2,400 selling unused tech gear and vintage clothes over six months. Declutter and save? That’s a win-win.
• “Monetize” your hobbies: Photography, tutoring, baking, or even pet-sitting—if you enjoy it, there’s probably someone willing to pay for it.
• Use windfalls wisely: Tax refund? Annual bonus? Instead of the usual “treat yourself” routine, commit 80–100% of any windfalls to your down payment fund. It's a painless way to get ahead.

Even small increases in income can compound quickly—especially when you’re automating where it goes.

Rethink the Timeline: Speed Isn’t the Only Goal

There’s this unspoken pressure that if you’re not buying a home by 30 (or insert arbitrary number), you’ve somehow failed. Let's clear that up: It’s not a race.

In fact, giving yourself more time can make saving feel less like a sprint and more like a steady hike. Here’s what adjusting your timeline could do:

• Lower stress and burnout: Stretching your goal by 6–12 months may reduce the amount you need to save monthly by hundreds of dollars.
• Buy smarter, not faster: More time could mean waiting for a buyer’s market, or simply being more selective.
• Build better credit in the meantime: If your credit score needs work, giving yourself extra time may help you qualify for better mortgage terms, potentially saving you thousands in interest.

You may also want to pause and ask yourself: Do I really want to buy in this market, right now? Sometimes renting while you save is the smartest financial move you can make.

A Few Tips That Aren’t Often Talked About:

• Run a “practice mortgage” test: Start paying the difference between your current rent and your projected mortgage into savings now. This not only grows your fund faster but also helps test if you’re truly ready for higher housing costs.
• Learn the local grants and programs: Many cities and states offer down payment assistance programs for first-time buyers. Some are income-based, but many are simply underutilized.
• Tap into financial “nudges”: Apps like Qapital or YNAB let you round up purchases or set micro-rules to stash tiny bits of money daily. It’s amazing how fast $1 here and $5 there add up.

Make it Feel Personal, Not Punishing

Saving for a down payment is one of those adulting milestones that looks intimidating until you start chipping away at it. The trick isn’t to be perfect. It’s to be intentional.

I’ve seen people from all walks of life find creative, manageable ways to fund their home dreams. None of them had massive inheritances or six-figure salaries. What they had was clarity, commitment, and a system that made the process feel human—and dare I say—almost enjoyable.

So if you’re saving for your first down payment and it feels like a mountain, take a breath. The mountain is real, but so is your ability to climb it—with the right gear, the right plan, and a little grace along the way.

MJ Brioso, Writer, The Urban Explorer

MJ is our go-to guru for all things city life. With a love for shopping and a passion for cultural exploration, she's constantly diving into the heart of big cities, finding hidden gems that most tourists miss.