How to Save Money for a Down Payment on a House

down payment moneyOne of the most exciting days of my life was moving into our new house. The pain of saving money for a down payment was worth it!

Did you know that single women are more likely to buy houses than single men? No matter what your relationship status is, these tips on saving money for a down payment on a house could change your life.

Three of these six money saving tips are practical, and three are psychological.

Here’s the most obvious way to save money for a down payment: “Never spend your money before you have it.” ~ Thomas Jefferson.

I know it’s an obvious tip, but people just don’t get it. Stop using those credit cards for stuff you don’t need! If you or your partner can’t stop spending money, read To Buy or Not to Buy: Why We Overshop and How to Stop.

6 Ways to Save Money for a Down Payment on a House

1. Set up a glass savings jar on your desk at work. This is one of the most creative tips for saving money. The folks at the BHM Financial Group say, “Write, ‘Teach me How to Save Money’ on a glass saving jar on your desk, and have your friends and co-workers write down all the ways they see you throw away money, and stuff their money-saving suggestions into your jar. Set one up for your spouse and kids, too.” This is fantastic, because learning how other people saved money to buy their houses will help you save money to buy your home.

If you’re saving money after a financial disaster, read How to Attract Money When You’re Starting Over.

2. Be objective and strategic about dealing with your money saving obstacles. What holds you back from saving money for a down payment on a house? Low income, high debt, bad financial management habits? Whatever your “money problem” is, remember that there are ways to overcome it! Different problems have different solutions, but there are some general rules for moving forward in life. For instance, don’t focus on what you lack (eg, a financially compatible partner). Instead, focus on what you want more of in your life (financial harmony and the financial freedom to buy your house). Be clear and specific about saving money to buy your home; avoid getting caught up in emotion or negativity.

3. Be honest about your saving and spending habits. In The Top Predictor of Divorce – and How to Avoid It, I discuss how and why money causes serious relationship problems. If you’re in a relationship, remember that money problems get worse when one or both partners lie about money, hide their spending or saving habits, and avoid talking about debt problems. Lying about money is surprisingly common for couples…and it keeps them in financial, spiritual, and emotional debt. Be as honest as you can about your financial habits with both yourself and your partner — it’ll save you money and heartache in the long run.

4. Pay twice – it teaches you how much money you could save! Here’s another great tip on how to save money for a down payment on a house from the BHM Financial Group: “Every time you buy a cup of coffee, lunch, or a newspaper, magazine, DVD or other entertainment material, put the same amount of money into an account intended for saving or bill payments,” writes Cassandra in Better Attitude, Bigger Income. “See how much money you’ve saved at the end of the month. Now you know how much money you spent (but could’ve saved) this month. This little trick will also show you how much those items really cost, since most of us only take home about one-half what we earn. So, buying that $5 DVD is really costing you $10, that coffee is really about $7.50, and going to the movies? Whoa . . . but, you get the picture.”

The next two tips on how to save money for a down payment are for couples…

5. Figure out what prevents you from saving money. Are you frustrated because you and your partner have different money personalities (you’re a saver and he’s a spender)? Are you depressed because you and your partner can’t agree on your financial goals? Maybe you feel overwhelmed by credit card or student loan debt that you can’t pay off. The first step to saving money for a down payment on a house is to identify what’s holding you back.

6. Find meaning in your experiences as a happy couple, not your possessions. I know how fun it can be to buy new things – I’m not a shopper, but I’ve experienced that addictive “shopper’s high.” But, I also know that spending money isn’t the only way to feel good. In fact, spending money may one of the least satisfactory ways to be happy because it requires a constant outflow of money.

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