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So you want to buy a house. Most of us have been there, made the decision that we’re ready to own a piece of land all of our own, unfortunately it’s not that simple. You figured out the what, buying a house, but the how is a little more complicated. You don’t have $15,000 saved up and quite frankly it seems impossible to get there; there is no money left over at the end of the month. So how do you do it? How do you save up enough money for a down payment?

There are many articles, books, and opinions on the subject so instead of diving into those I’ll speak only from personal experience and what worked for my husband and I.

1. Know where your money is going. For one month don’t change your money habits, instead track where every dollar goes. Break it into categories that are relevant for your life: groceries, rent, vehicle payment, bills, entertainment, eating out, gifts, smoking, charitable donations, grooming, fuel, and so on. (I personally love an excel sheet for this and we sat down with all our receipts once/week to enter everything in.) At the end of the month look at each category with a critical eye. Were there surprises? Do you spend more (or less) on necessities than you thought? Were there any impulse buys or unnecessary expenditures? 

2. Find easy cutbacks. For us the easiest cutbacks were in groceries and eating out (including morning coffees). We realized that if we only went to the grocery store once per week our total grocery budget went way down. We said goodbye to impulse buys and quick trips and hello to a world of planning in advance. We also set limits on how much we could spend per month eating out. This took some creativity on what cost-effective alternative activities we could do with friends but we found that all of our friends were very supportive and accommodating.

3. Dig deeper. Now that you’ve made some easy cutbacks and see how quickly money goes out it’s time to look a little deeper. I am not advising that you sacrifice everything and have a horrible quality of life but see what else is feasible. Maybe you cancel the cable and only have Netflix. Or you get your hair cut but not dyed. Or you go out with friends one week and the next week is a potluck style meal at your place. These small changes really add up, furthermore look at your bills. What are you paying/month for cellphones, power, and gas? Do they have any offers or promos that could save you money? There is no harm in asking.

4. Set up a savings account. Most banks will allow you to easily set up a separate savings account online. Try to find one with no minimum balance and no monthly fees, furthermore make it inaccessible from your debit card. If possible rename it “house down payment”. This reiterates in your mind the goal and what you’re working towards. Move these small incremental savings into that account, and continue to do so every month. Now watch as you start to get paid for the money you have sitting in there (I know it's not a lot but sometimes you have to appreciate the little things!).

5. Automatic Transfers. Similar to how a vehicle payment comes out of your account automatically set up the same for savings. If you get paid on the 15th and 30th set up an automatic transfer on the 16th and 1st to have $50 transfer to your savings account. Try this for a couple months, if possible up it to $100, then $150. Make it automatic so it happens without you thinking about it. You'd be surprised how quickly you adjust to spending less when it's already allocated elsewhere.

6. “Side hustle”. If you’re like me then all of these side hustle “just start a blog and make an extra $1000/month” are a little frustrating and unrealistic. Instead I did something I knew would help me feel better and make some money. I decluttered for a profit. We went through clothes, furniture, and boxes full of stuff and sold it all. The saying “one man’s junk is another’s treasure” really is true. We sold items on Kijiji and at a local consignment store. This money went straight into the savings account and contributed to our down payment fund.

7. Unexpected money. Do you have an aunt or grandparent who randomly gives you $200 and tells you to buy something nice for yourself? What about a generous boss who gives out a Christmas bonus? How about a tax refund? I know it’s tempting to go out and spend it but try to put most of it (and if you're feeling really crazy all of it) into your down payment fund. It’s these larger contributions that will make the biggest difference.

I know it can seem daunting and discouraging, I’ve been there. I remember watching all of our friends go on big vacations and spend whatever they wanted when they wanted while we sat at home saving. It takes a commitment to the goal and a balance between saving every penny and having some freedom. I really encourage you to use moderation, don't sacrifice your quality of life in the meantime. We did it though and I am sure you can to. Let me know if I missed any great tips or what you did to save your down payment. 

-Stefanie Miller.