How To Save For A House While Renting

Tip 1. Pay Off Credit Card Debt

It’s crucial to remember your credit score and debt-to-income ratio are both key factors that lenders consider when qualifying you for a loan. When the time comes to search for real estate and get a mortgage, you will definitely be happy you got rid of any outstanding debt ahead of time. Because of this, you may even be able to score a lower interest rate.

Tip 2. Get A Roommate

This is one of the easiest ways to save some money while renting. By finding a suitable roommate, you can cut your utilities and rent in half overnight. This ends up adding a lot of savings toward your potential down payment. 

Tip 3. Budget

Once you have set a firm financial goal, it’s time to implement a budget and stick to it. Try to follow the common 50/30/20 rule, where you allocate portions of your paycheck to the following expenses:

• 50%: Essential expenses like food and housing.
• 30%: Lifestyle expenses, such as entertainment.
• 20%: Miscellaneous priorities like paying off debt and/or loans. 

Tip 4. Cut Back On Unnecessary Expenses

Consider cutting back on expenses that feel unnecessary, especially when you are trying to save money. Try going out to eat less or cutting back on shopping. You can always shave a few dollars off by investing in energy efficient lighting. Small changes will end up being worthwhile once you are turning the key to your new home. 

Tip 5. Save Tax Refunds

Resist the urge to spend your tax refund right away. Instead, stick your refund into your savings account for your future home.