Buying your first house is a big step in your adult life.  Saving for the down payment can seem like a massive hurdle. 

The responsible buyer will be putting 20% down. When calculating 20% of the house value, this hurdle can seem even larger.  However, there are many steps you can take to make this very achievable and decrease issues along the way. 

Before saving for a down payment, you should be free of high interest debt (ex: credit cards) and have a full emergency fund. You want to focus on these first so you can be financially secure before putting any money towards buying a house. Financial unstable homebuyers are the most at risk for either default or needing to borrow high interest debt in order to cover unexpected expenses. 

Once you have accomplished the first two tasks, you are now onto the down payment.  This is where it becomes extremely valuable to work with a Certified Financial Planner™ who will create a comprehensive financial plan that includes the home purchase as a financial goal.  Where a lot of homebuyers create issues for themselves is by buying too much house.  They follow the lead of their friends (a “keeping up with the Joneses mentality) or their Realtor (who gets paid based off of the home value - higher the price, higher the commission).  Working with a Certified Financial Planner™ who is also a fiduciary will help you determine how much house you can truly afford while also being able to achieve your other financial goals.  (Think about your children’s college education, your car that needs to be replaced soon, your retirement, etc.)

Once the Certified Financial Planner™ determines how much money you need to be saving for a down payment, it is likely up to you to make those transfers happen.  The easiest way is to set an automatic transfer of the amount into an investment account every month. Moving the money to a separate account from your day to day checking account helps get the money “out of sight, out of mind.” 

It will take time, there is no doubt about that.  It is also likely you will face temptations daily to avoid the monthly savings. However, those who stick to the plan will find they reach that down payment target amount faster than they initially thought and will soon be holding the keys to their new house!