Saving for a down payment is a big step when you are buying a home. Although some types of loans like VA, FHA, and USDA only require a small down payment or no down payment at all, it is not always the best solution. Not everyone qualifies for a low-to-no down payment loan and putting more money down could save you money in the long run, with fewer interests and no private mortgage insurance (PMI) necessary.

However, saving enough money to put 10%, 20% or more to buy a house can feel like a daunting task. This article will help you figure out which is the best way for you to start saving for a down payment. 


  1. Set up an automatic direct deposit into a saving account

You cannot spend money that is not in your account. If your budget allows (and if you are planning on buying a house, it probably should), set up a direct deposit from your spending to a dedicated saving account for a set amount of money out of your paycheck. 


  1. Cut off some of your expenses.

While you are in the process of saving to buy a house, it is a good idea to remove any unnecessary expenses out of your budget and put the money you would spend towards your down payment instead. Postpone holidays, cook at home instead of ordering take out or eating out, let go of your drive-thru coffee habit, cancel subscriptions you are not interested in anymore, cancel cable to use cheaper streaming alternatives, etc. These small amounts will quickly add up. 



  1. Get a second job

If possible, join the nearly 4 in 10 Americans that have a side hustle and put that additional income towards your down payment. From driving for rideshare apps to watching children from your home, moonlighting as a freelancer or working in retail on the weekends, you can probably find a way that suits your skills and schedule to add up to your income. 


  1. Reduce your debt

High-interest credit cards can put a damper on any budget. Whether it was a string of bad financial decisions or a rough patch that put you into that situation, it is a good idea to tackle your debt when you are saving for a down payment. Reducing your debt-to-income ratio will also help you when you apply for a loan. As you lower your debt, either by paying off your credit cards or consolidating your debt, put the money, you will save on monthly payments toward your down payment.



  1. Get money out of your retirement plan.

Depending on your situation, you might be able to pull out some money from your 401(k), 403(b) or IRA retirement account to put it towards your down payment. However, there can be some severe repercussions if you lose your job or do not repay these loans, so you need to take an honest look at your overall financial situation if you make that decision. 


  1. Investigate down payment assistance programs

Depending on your financial situation, your location, your personal history and the type of property you are interested in, you might qualify for a down payment assistance grant or program. Many of them are backed by government institutions like the Department of Housing and Urban Development (HUD).  Ask your mortgage broker or financial advisor if he or she has any knowledge of grants or programs you might qualify for.