10 Simple Ways to Save 100k for a House Deposit

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Why You Should Save $100,000 for a Home

For some people, saving up just a few thousand dollars is sufficient for a down payment. However, it takes time, goal setting, and motivation to build up 100k for a house deposit.

I own both a personal residence and rental investment properties. My husband and I love to pay as much in cash as we can, and saving 100k to pay for a rental property in cash is an incredible feat – if you’re diligent!

So, why would you want to save $100,000 in cash for a home deposit, or to buy a home.

First, it is commonly known that the more money you put down, the more expensive home you can purchase. However, this thought process isn’t always advisable, due to the fact that more expensive homes come attached with more expensive monthly payments.

However, having this much money paid upfront can significantly reduce your monthly payments on a home you “can afford” due to having a smaller loan. You can also reduce your chance of having to pay a PMI (primary mortgage insurance).

With this in mind, in this article I will share my favorite financial tips to saving $100,000 for your house deposit. I will also cover how to earn more money on the side and how long to expect to save up this money!

How to Save $100,000 for a House Deposit

There are many books for beginners out there in the category of finance, but one of the more famous books called The Barefoot Investor wrote this suggestion: “Live on one income and save the other in full”.

When it comes to saving a huge sum of cash such as $100,000 for a house deposit, the answer to how to save this money is pretty straightforward: Earn more, save more, and spend less.

Now, this does sound very simplified and “easier said than done”! Let’s dive into exactly how to save up this money.

Tip 1: Don’t Put Your Savings into Checking Accounts

This is a great tip I learned awhile back. With typical checking accounts, percent return is something ridiculous like 0.01% or less. If you plan on putting tens of thousands into a bank to save up, it would be nicer if that money would grow itself.

Therefore, I’d recommend looking into a high yield savings account that is more like 2% or more, this could mean thousands less in the end that you’d have to earn and set aside.

I have no specific high yield account that I personally like, but feel free to explore around to companies like Ally or Discover to see who has a good percent return and fits your needs best!

Tip 2: Improve Your Saving Discipline

Down below I will discuss many ways to earn more money, save, and spend less.

However, it is critical to realize that to save this magnitude of money in a short period of time, you need to be serious about it!

For example, you need to think about the small purchases you make – not just the big ones! If you make a $5 coffee purchase every day but infrequently make purchases over $100, what makes a bigger difference in the end?

Be sure to learn these 7 unique ways to start earning $50 each day!

How Long Does it Take to Save $100,000?

In short, it takes an average American 5 years of diligent saving to save $100,000. A goal of 2-3 years is considered a short time to save 100k for a house deposit if you are starting from nothing.

How much do you have to save every month for those few years?

• If you want to save $100,000 in 1 year, you’d need to save around $8,350 a month!
• If you want to save this in 2 years, you’d need to set aside $4,170 a month!
• In 3 years, it would take $2,800 a month to save 100k.
• 4 years of monthly payments would require $2,100 each month to accumulate $100,000.
• Lastly, if you want to save $100,000 in 5 years, a monthly payment of $1,670 would get you to your goal!

Now, keep in mind that if you put your money into a high yield savings account or money market account, this amount could be very different due to earning interest. Be sure to do your math based on your specific goals!

10 Simple Ways to Save for a Down Payment

• Set a budget to save money

Using a budget is critical to understanding exactly where your money is going. You are likely to find money that you could save – whether it be due to eating out often or having too many subscriptions.

I use a free app called Personal Capital, because it helps me both budget and watch my net worth. Check out my full review of this app here!

• Spend much less

This ties into the concept of budgeting. In order to expedite the process of saving up 100k, you simply need to figure out how you are going to spend less. Look at your budget and discover where you’re spending too much. 

• Cancel subscriptions

Whether it be food, makeup, dog toys, or even cable, you need to consider if that extra $30, $45, or even $15 could add up in the end – then really reconsider if you need those subscriptions in your life.

• Renegotiate rates

A unique way to save money is to negotiate rates. For example, insurance, cell phone, and cable bills can be negotiated to lower rates. This is an awesome way to save money month by month to start adding to your savings for your 100k goal for your house deposit.

• Get a roommate

House hacking is an up-and-coming, exciting way to save money. I first learned about this from The House Hacking Strategy book written extensively on the topic by Bigger Pockets, here. You could potentially save hundreds each month, or, earn hundreds each month from house hacking or simply getting a roommate!

• Meal prep

Meal prepping is a great way to save money – especially long term! I personally meal prep for breakfast and lunches and it is helpful to bring down my monthly spending. Check out my article here where I dive into how to set up meal prepping in order to save big money!

• Start a side hustle

The concept of a side hustle is to add on small ways to earn more money – whether this be reselling items on eBay, starting a blog, creating YouTube videos, writing an eBook, or simply selling items around your house on Marketplace.

• Don’t spend money on big vacations

This is an important consideration – especially since vacations can cost thousands! Little road trips can be inexpensive, but watch out for those pricy vacations when you’re trying to save such a large sum of money!

• Get rid of debt

This tip is common but critical. If you’re trying to save money, imagine how much quicker you could save if you didn’t have to pay that $800 monthly student loan bill or your credit card payments!

• Stop buying materialistic items

Keeping up with the Jonses is a real issue for many of us, especially if you are on a journey to save 100k for a house deposit. But, if you want to stray from making unnecessary purchases during this time, you may need to stop comparing yourself to others and start being okay with what you own!

Ready to learn more? Check out these articles!

• How to Use the 70/20/10 Budget to Achieve Your Financial Goals
• How to Save Money by House Hacking