9 Tips for Saving Up a Home Down Payment

As a general rule, it's wise to aim to make a 20% down payment when you buy a home, as doing so helps you avoid private mortgage insurance, a costly premium that makes owning your home more expensive. Furthermore, some mortgage lenders may require a 20% down payment on a home at closing, even though other lenders might accept less. Of course, saving up for a home is easier said than done, but here are some tips for rounding up that cash.

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The first step in saving for a home down payment is figuring out how much you want to spend on a place of your own. From there, you can calculate what your down payment will look like. As a general rule, you should aim to keep your housing costs, including your mortgage payment, property taxes, and homeowners insurance, to 30% or less of your take-home pay, so that should give you a sense of how much house you can afford and how much of a down payment you'll need.

Following a budget will help you spend more mindfully, and that alone could make it easier to carve out savings to buy a home. Once you see what your expenses look like, you can identify ways to cut back.

There are probably things you pay for each month that you can do without, whether it's restaurant meals, your gym membership, or your cable plan. If you're serious about buying a home, you may need to make some sacrifices to hit your savings target sooner.

You need a roof over your head and a vehicle to get around -- those things are probably nonnegotiable. But that doesn't mean you can't spend less on them. See if you can negotiate a rent reduction with your landlord, or if you can move on the cheap, find a less expensive home to rent altogether. Similarly, if you have a huge car payment, look at swapping your current vehicle with a more budget-friendly model.

You may get a raise at work after being at your job for a certain amount of time or in conjunction with a promotion. If that happens, sticking that extra money in the bank could go a long way toward amassing your home down payment, and since it's money you're not used to spending, saving it shouldn't require any sacrifices.

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But with so many cards out there, you need to choose wisely. This top-rated card offers the ability to pay 0% interest on purchases until late 2021, has some of the most generous cash back rewards we’ve ever seen (up to 5%!), and somehow still sports a $0 annual fee.

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Most people who file a tax return wind up with a refund from the IRS. Yours could make a nice dent in your down payment, so resist the urge to spend it.

Whether it's a commission or bonus at work, a stimulus check, or a birthday gift, you may come into extra money in the course of the year. Saving all of it will help you buy a home faster.

Boosting your income with a side gig is a great way to drum up cash for a down payment. These days, there are a host of second jobs you can look at. If you're nervous about work that causes you to interact with others, focus on finding a gig you can do from home, like telemarketing or web design. If you're up for some interaction, sign up to walk dogs, babysit, tutor, or work for a rideshare company.

Nice as it is to get away, if you're willing to forgo one vacation, that alone could free up thousands of dollars toward a down payment. And if you can't give up a vacation completely, considering scaling back and taking a less expensive one.

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The more money you put down on your home, the less expensive your monthly mortgage payment will be, and the less money you'll spend on interest in the course of paying off your home. These tips will get you closer to that down payment -- and enjoying the benefits of having a place to call your own.