You know you want to own your own home one day, but you don’t know how to figure out how much money you’ll need, let alone how to actually start saving. Working through these five steps will help you develop a plan to move your home-buying dreams forward, and show you how to save for a house with some traditional and not-so-traditional saving advice.

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1. Set a Goal.

When you’re trying to sort out how to save for a house, you need a starting point. Figuring out a potential down payment amount is a great place to start. Look at the average cost of a realistic home for you, work out the down payment you’ll need and divide that figure by the number of years you have to save. If you can make a down payment of at least 20% of the purchase price, you may qualify for a conventional mortgage and avoid costly Private Mortgage Insurance (PMI).

To make a 20% down payment on a $150,000 home, you’d need $30,000. If you will be making this purchase in five years, then you need a plan to save $6,000 annually or $500 each month starting now.

So, add “house savings” to your budget, and set up a recurring automatic payment from your checking account to a savings account (see next step).

2. Open a Savings Account.

Keep your house savings separate from your other money—so you don’t spend it in error or become tempted to use it for something else—by opening a savings account just for your house savings. Research available savings accounts online and at various financial institutions. Compare interest rates, features and fees.

Look for a high interest rate savings account so your savings grow faster. Save a set amount automatically as part of your budget, then top up with “extra” funds you may receive as gifts, tax refunds or work bonuses.

3. Cut Your Current Housing Costs.

If you’re wondering how to save for a house while meeting your current expenses, start by looking for ways to reduce your current housing costs. Many aspiring homeowners find their current rent is their biggest expense (a recent study of 50 U.S. cities reported a median monthly rent of $1,234.43 for a one-bedroom apartment).

Options for cutting housing costs may include:

  • moving home
  • getting a roommate
  • renting a cheaper place

If you can cut your current rent, you’ll have extra money to put toward the down payment for your future home.

4. Cut Your Other Costs.

In addition to reducing your rent, look for ways to cut your other expenses. You may decide to completely eliminate some bills while you’re saving to buy a home, such as your cable service or other subscriptions.

If you have other debt, see if you can find a better interest rate. For example, you may have an opportunity to consolidate other credit card balances to a lower-interest card with a balance transfer.

Also call up your phone and internet providers to try to negotiate a lower rate on your current plan. Let your providers know of any competitor offers to boost your chances of cutting your current phone and internet bills.

Apply all these savings directly to your home savings account.

5. Increase Your Income and Savings.

Getting a raise at work isn’t the only way to boost your income. Consider taking on a part-time job while saving to buy your first home. Look for opportunities to do freelance work, or turn your hobby into a part-time small business.

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Look through your belongings. Sell any clothing, sports equipment or small appliances you no longer use or want through your local online classifieds, and save the proceeds.

Saving for a home takes time. Learning how to save for a house is the first step. And with perseverance and a little creativity, your savings will grow and soon you’ll own a home of your own.

Legal Disclaimer: This site is for educational purposes and is not a substitute for professional advice. The material on this site is not intended to provide legal, investment, or financial advice and does not indicate the availability of any Discover product or service. It does not guarantee that Discover offers or endorses a product or service. For specific advice about your unique circumstances, you may wish to consult a qualified professional.