How to save for a house in one year

Rent probably takes the biggest bite out of your monthly budget. Move in with a friend, family member, or roommate to lower these expenses for the year. In terms of slashing costs, sharing expenses is a great place to start. Saving $50 per month means an extra $600 in your pocket for the year. Or go for gold and shave $100 off your rent to save $1,200 in a year.

Taking care of some small things for your landlord can be a big help. For example, if the cost of raking, shoveling, or lawn-mowing is part of your current rent, ask your landlord if you can take responsibility for doing these tasks in exchange for a reduction in rent. Since these services tend to be expensive for property owners, ditching them can be a win-win for you both. 

Reducing your spending each month often comes down to a simple question: Do you need something or do you want it? When it comes to budgeting, even having a car (or an extra car) should be up for debate. Can you live without your own set of wheels for a year? If you live in a city or walkable neighborhood, give public transportation or ride-sharing services a try. You might be surprised by how much money you can save by ditching a car that’s always sitting idle in the garage.

Small expenses span from entertainment subscriptions like Spotify and Netflix to clothes shopping. Try to bring ‘personal’ services in-house: Make your own coffee, color your own hair, and cut your cable cord. The average cable bill costs about $100 per month. Most streaming services are less than $10 per month. This will give you a monthly savings of $90. Cut back on the number of times you eat out or take out meals each week. If grabbing lunch at a local place costs $10 but packing your own costs only $4, a DIY approach could add up to a monthly savings of $180.  

Your cell phone, insurance plan, and credit cards: These are the cost of ‘operating’ your life. Request discounts, switch to basic plans where possible and look for reward plans. Be prepared to forgo some services altogether, but be prudent about not cutting the necessities, such as healthcare. Since you know you need to bank $4,167 every month for that $50K down payment, every adjustment counts. Making changes could save you close to $400 per month. Remind yourself of that number when you feel like living on the basics is too bare bones.

In addition to saving money, many first-time homebuyers may need to find a way to earn more to meet their goal. Consider 

It’s easier than you would think to sell new and gently-used items—from textbooks to bike racks—online through Craigslist or Facebook Marketplace. Did you splurge on something you never even wore? New, unopened items like shoes or designer perfume can go for a fair price on sites like The Real Real and Tradesy. You could earn up to $1000, on average, by re-selling the items in your closet. Once you’ve mined that source, open a few boxes in the basement. Vintage vinyl, signed copies of books, even matchbox cars, pin collections and posters (especially those in mint condition) are worth more than the effort of posting, packing, and selling. 

Eliminate expensive entertainment. Even one date night to the movies per month can put a dent in your efforts! Two tickets, sodas, and a large popcorn typically cost about $35. Netflix and relax? Maybe $5. If you’re used to buying a bottle of wine and a six-pack at the store each week, your alcohol tally could be up to $65 per month. Try the no-spend weekend and you could be looking at an additional monthly savings of $45. Exercising at home instead of paying for a gym membership (or finding free yoga classes in your area) can slim your budget with a monthly savings of $60 per month.