Two girls shopping and looking at a pink shirt in a store.

Keep Your Lifestyle and Still Save for a Home

Note: originally posted on and LendingHome is now Kiavi.

Saving money for your first house doesn't have to involve sitting in a dark, freezing apartment (heat is expensive!) sipping Cup O' Noodles. If you're wondering how to save for a house, you're in the right place. We break down ways to save that won’t cramp your style. How does giving yourself a monthly allowance and throwing dinner parties sound? More on those revelations later.

First, start by figuring out what you’re working toward. Ballpark how much you’ll need for your down payment, then work backward: what’s it going to take to reach your goal, and when do you want to get there? Simplified, that’s money needed divided by time = your monthly/daily/yearly goal for saving. Once that’s calculated, the next step is to figure out where you’re going to put all that money.

Save for a home by opening a dedicated savings account

This separate savings account is solely for the house of your dreams. This isn’t the trip to Mexico fund, or money for a new leather handbag, this is the someday soon I’ll be a homeowner account. Do a little research to find out where you can get an account that will yield the highest interest so you can watch your money make money while you sit back and laugh gleefully. Then start growing that account.

Save for a home by hiding money from yourself

You know when you find $5 in your pocket and it makes you want to do a little Irish jig? This is kind of like that, but instead of using the money to treat yourself to a cupcake, you use the money to buy a whole house. After that, you’ll be doing a lot more than a little jig.

There’s two ways to go about this. First, calculate what your estimated monthly mortgage payments would be, then every month, put that amount into your dream home savings account. If that’s too much of a stretch for you in addition to the rent you’re already paying, then pay your rent and deposit into your house savings the remainder of what would equal your total mortgage. So if your rent is $550 & your estimated mortgage is $1,000 per month, put an additional $450 into the house account so you can feel what it’s like to live on the remaining amount after paying a mortgage.

The second way is all about automatic deposits. Some people call it the "set it and forget it" approach. Through your bank, set up automatic recurring deposits into your house savings account. To really hide money from yourself, set the deposit date to be the same as pay day so you never even see the money in your everyday account. Push yourself to deposit the largest amount possible, using the suggestions above as a starting point.

And finally, anytime you come across "bonus" money, whether it’s a raise, an actual bonus, a birthday check from grandma, or a dollar in the street, put it straight into your house savings account. That also goes for what could be your biggest bonus of the year: your tax refund.

Give yourself a weekly cash allowance

Mmhmm. That’s right. And unlike when you were a kid, no one’s going to hold out on you until all your chores are done, because you’re an adult now, darnit, and you decide whether you’re going to make your bed! But seriously, take a look at your overall budget , determine what makes sense as a weekly allowance, and what should go into that allowance—coffee stops, movie tickets, new clothes, fast food lunches, etc.

Then over the course of the week, budget accordingly so you can live the good life until the next time you replenish your allowance. Before you blow $12 on a gourmet salad on Monday, think about how future you would love to start Friday with a caramel latte. Once that cash allowance is gone, that’s it. Do not pass the ATM, and collect $20.

And using credit cards to boost your allowance throughout the week? Refrain! Refrain! You don’t want to get yourself into debt (or push yourself further into debt) when the point of this exercise is to save. If you need to cut them up to keep yourself from swiping, go find the scissors.

Let technology do the heavy lifting

Instead of spending hours on a Sunday filling a shoebox with paper coupons, check out these helpful tools that’ll do all the work for you.

  • Retale: brings hundreds of ads, deals, and coupons to your smartphone. Use location services to filter to local offers, save deals for later, search by product or retailer, and get notifications on the latest bargains.
  • gives access to thousands of coupons and codes to copy and paste, drag and drop, print out, or add to your relevant loyalty cards. Also set notifications to alert you of nearby deals.
  • Honey: automatically finds the best coupons and promo codes and applies them to your total with just one click.
  • Ebates: pays members (membership is free) cash back every time they shop online and provides them with the best coupons and deals as they’re browsing.

After you’ve saved a ton of money using the above strategies, it’s time to manage it. Luckily, there’s an app for that! Several, actually.

  • Digit: syncs with your checking account and analyzes your spending to look for money you’re not using. If Digit spots an opportunity, it automatically transfers the money to a separate savings account. If you keep a balance in your Digit account for at least three months, they’ll give you 5 cents for every $100 you save. Money making money!
  • Mint: links to your checking account and credit cards to analyze how you’re spending. Use Mint’s personalized budget categories to spot where you’re spending the most, and adjust accordingly.
  • YNAB (You Need A Budget): works by getting you to pay careful attention to what you’re spending. It costs $5/month or $50/year (you can try it out for 34 days for free), but promises to help you save $200 your first month.

Save for a home by hacking expensive habits

We’re not talking collecting Lamborghinis or letting nothing less than Dom Perignon touch your lips. This is about the "treat yourselfs" that quickly become budget breakers. As promised in the title of this article, continue on with the little luxuries, just approach them in a different way.

Love going out to dinner to catch up friends? Absolutely, until the bill comes, and even after splitting it five ways you owe $70. This tip is worth much more than 20 percent: invite everyone over for potlucks instead. You get the latest gossip, it doesn’t cost you a penny, and you get to keep all the delicious leftovers.

Ever heard of the Latte Factor? It’s a concept financial advisor David Bach came up with that essentially points out how much you’re spending on coffee daily and what else you could be doing with that money. Simply put, if you treat yourself to a latte every working day, that’s a $1,000 a year for those non-fat, no foam caffeine jolts. And if you go absolutely every day (it is a habit…), that’s nearly $1,500. Keep your morning bump going by making coffee at home and mixing it up with flavored creamers. Saving hundreds of dollars will taste better than that fancy espresso. Of course, the Latte Factor applies to plenty of things other than coffee. Just pick the ones that you feel like you can most easily replace with cheaper or at-home options.

The same concept applies to more expensive habits – like getting your hair done or the weekly mani/pedi you can't live without. Students at local beauty schools are often looking for models to practice on at very discounted rates.

Let the little things add up (in savings)

Just a few small tweaks to your daily routine can save a few dollars here and there, which together add up to a lot more dollars.

  • Group electronics into power strips and switch them off when you leave the house. You may see a small decrease in your next bill, but keep in mind, it all adds up!
  • Consider saying no to guac. Little add-ons like extra toppings and adding a soda can push the lunch bill into a luxury item. Just say no, or better yet, bring your lunch from home.
  • Switch to basic cable, or give up cable altogether and watch shows and movies on-demand or on a pay-per basis. As an added bonus—never suffer through a bad local ad again.
  • Take public transportation, or carpool. Gas, taxis, Ubers—pretty much any form of individual transportation—don’t fare well for your wallet. Delete all ride hailing apps from your phone, and check out your local bus and train routes, or send a note to colleagues to get a carpool started.

And here you thought we were kidding when we said saving money for a house involved giving yourself an allowance and throwing a dinner party with all your friends, right? Remember, you don’t have to do everything at once, even putting one of these tips into practice will get you off on the right foot. You have to start somewhere!


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