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How to Save for a Down Payment When You’re Broke

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Dreaming of owning a home but feeling like your empty wallet is holding you back? You’re not alone. For many, saving for a down payment can feel impossible, especially when you’re living paycheck to paycheck. Rising home prices and everyday expenses make the goal seem even further out of reach. But here’s the good news: with the right strategies, even those starting from zero can make real progress. If you’re determined to break out of the rent cycle and build a future, this guide is for you. Let’s dive into practical, actionable steps to help you save for a down payment when you’re broke.

1. Get Real About Your Down Payment Goal

Before you start saving, you need to know exactly what you’re aiming for. Many people assume they need 20% down, but that’s not always the case. Some loans require as little as 3% down, and there are even programs for first-time buyers that offer assistance. Use online calculators to estimate how much you’ll need based on your target home price and loan type. Setting a clear, realistic goal makes the process less overwhelming and helps you track your progress.

2. Track Every Dollar

When you’re broke, every cent counts. Start by tracking your income and expenses for at least a month. Use a budgeting app or a simple spreadsheet—whatever works for you. The goal is to see exactly where your money is going. You might be surprised by how much you spend on small, everyday purchases. Once you have a clear picture, you can identify areas to cut back and redirect those funds toward your down payment savings. This step is crucial for anyone serious about saving for a down payment when you’re broke.

3. Slash Unnecessary Expenses

Cutting costs doesn’t mean giving up everything you love, but it requires honest evaluation. Look for subscriptions you rarely use, dining out habits, or impulse purchases that add up over time. Even small changes, like making coffee at home or canceling a streaming service, can free up extra cash. Redirect these savings directly into a separate account dedicated to your down payment. Remember, every little bit helps when you’re trying to save for a down payment with limited resources.

4. Boost Your Income with Side Hustles

Increasing your income can make a big difference if your budget is already tight. Consider picking up a side hustle, freelancing, or gig work. Options like dog walking, food delivery, or online tutoring can fit around your main job and bring in extra cash. Even a few hundred dollars a month can add up over time. The key is to dedicate all side hustle earnings specifically to your down payment fund, so you see real progress.

5. Automate Your Savings

One of the best ways to save for a down payment when you’re broke is to make saving automatic. Set up a separate savings account and arrange for a small, regular transfer every payday. Consistency is more important than the amount, even if it’s just $10 or $20. Automating your savings removes the temptation to spend and helps you build momentum. Over time, you’ll be surprised at how quickly your down payment fund grows.

6. Take Advantage of Down Payment Assistance Programs

Many states and local governments offer down payment assistance programs for first-time homebuyers. These programs can provide grants, low-interest loans, or matched savings to help you reach your goal faster. Eligibility requirements vary, so research what’s available in your area. The U.S. Department of Housing and Urban Development (HUD) is a great place to start your search. Leveraging these resources can make saving for a down payment when you’re broke much more achievable.

7. Sell Unused Items

Chances are, you have things around your home you no longer need—clothes, electronics, furniture, or collectibles. Selling these items online or at a garage sale can give your savings a quick boost. Not only does this declutter your space, but it also turns unused stuff into cash for your down payment. Make it a goal to regularly review what you can sell and add those earnings to your savings account.

8. Get Creative with Living Arrangements

If you’re serious about saving for a down payment when you’re broke, consider more drastic changes to your living situation. Moving in with family, getting a roommate, or downsizing to a smaller apartment can significantly reduce your monthly expenses. While these options may not be ideal long-term, they can help you save thousands in a short period. The sacrifice now can pay off big when you’re finally ready to buy your own place.

Turning Small Steps into Big Results

Saving for a down payment when you’re broke isn’t easy, but it’s absolutely possible with determination and the right strategies. By setting a clear goal, tracking your spending, cutting costs, boosting your income, and taking advantage of available resources, you can make steady progress—even if you’re starting from zero. Remember, every dollar saved brings you one step closer to homeownership. Stay focused, celebrate small wins, and keep your eyes on the prize.

What’s the most creative way you’ve found to save for a down payment? Share your tips and stories in the comments!

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Here’s What It Cost To Buy A Home in 1980

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House model with man's hand

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Buying a home is one of the biggest financial decisions most people will ever make. But have you ever wondered what purchasing a home in 1980 actually cost? Whether you’re a first-time buyer, a seasoned homeowner, or just curious about how things have changed, understanding the real numbers from the past can give you a valuable perspective on today’s housing market. The 1980s were a time of big hair, bold fashion, and, believe it or not, some pretty wild swings in the real estate world. If you think today’s prices are tough, wait to see what buyers faced back then! Let’s take a trip down memory lane and break down exactly what it cost to buy a home in 1980—and what that means for you now.

1. The Average Home Price in 1980

In 1980, the average home price in the United States was about $47,200, according to the U.S. Census Bureau. That number might sound shockingly low compared to today’s median home price, which hovers around $400,000. But before you start wishing for a time machine, remember that everything from wages to the cost of living was different back then. The primary SEO keyword, “cost to buy a home in 1980,” is at the heart of this comparison. While $47,200 seems like a steal, it’s important to consider what that amount meant in the context of the 1980s economy.

2. Mortgage Interest Rates: The Real Game Changer

If you think today’s mortgage rates are high, the 1980s will drop your jaw. In 1980, the average 30-year fixed mortgage rate was a staggering 13.74%. For much of the year, rates even soared above 15%. This meant that even though the cost to buy a home in 1980 was lower, the monthly payments were much higher than you might expect. High interest rates made borrowing money expensive, and many buyers had to stretch their budgets just to afford the payments. It’s a great reminder that the sticker price isn’t the only thing that matters when buying a home.

3. Down Payments: How Much Did Buyers Need?

Back in 1980, the standard down payment was typically 20% of the home’s purchase price. For the average home, that meant coming up with about $9,440 upfront. While some government-backed loans allowed for lower down payments, most buyers needed significant savings to get their foot in the door. The cost to buy a home in 1980 wasn’t just about the price tag—it was also about having enough cash on hand for that hefty down payment. Today, there are more options for low down payments, but in 1980, saving up was a major hurdle for many families.

4. Wages and Affordability: Could People Really Afford Homes?

Let’s put those numbers in perspective. In 1980, the median household income in the U.S. was about $17,710. That means the average home costs nearly three times the typical family’s annual income. While that ratio is similar to what we see today, the high mortgage rates made monthly payments a much bigger burden. The cost of buying a home in 1980 was a stretch for many, and affordability was a real concern, just as it is now.

5. Closing Costs and Other Fees

Buying a home isn’t just about the purchase price and down payment. In 1980, buyers also had to budget for closing costs, typically ranging from 2% to 5% of the home’s price. That’s an extra $944 to $2,360 on top of everything else. These costs covered loan origination fees, title insurance, and appraisal fees. The cost of buying a home in 1980 included these hidden expenses, which could catch buyers off guard if they weren’t prepared.

6. Regional Differences: Not All Markets Were Equal

Like today, the cost to buy a home in 1980 varied widely depending on where you lived. In some parts of the country, like the Midwest and South, homes were much more affordable. In high-demand areas like California and the Northeast, prices were significantly higher. For example, a San Francisco or New York City home could easily cost double or triple the national average. Understanding these regional differences is key when comparing the cost of buying a home in 1980 to today’s market.

7. The Impact of Inflation

It’s easy to look at the numbers from 1980 and think homes were a bargain, but inflation changes everything. Adjusted for inflation, that $47,200 home would cost about $170,000 in today’s dollars. While that’s still less than the current median price, the cost to buy a home in 1980 wasn’t as low as it might seem at first glance. Inflation affects everything from wages to home prices, so it’s essential to consider this when comparing.

8. What Buyers Got for Their Money

Homes in 1980 were often smaller and had fewer amenities than many new homes today. The average new home was about 1,700 square feet, compared to over 2,400 square feet today. Features like central air conditioning, walk-in closets, and open floor plans were less common. The cost of buying a home in 1980 got you a solid, comfortable house, but not necessarily the bells and whistles many buyers expect now.

Lessons From 1980: What Today’s Buyers Can Learn

Looking back at the cost of buying a home in 1980 offers some valuable lessons for today’s buyers. First, every era has its challenges— high prices, steep interest rates, or tough competition. Second, focusing on what you can control—like saving for a down payment, improving your credit score, and shopping around for the best mortgage—can make a big difference. Finally, remember that the housing market is constantly changing, and what seems impossible today might look very different in a few years.

What do you think—would you have wanted to buy a home in 1980? Share your thoughts and stories in the comments below!

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Financial Resolutions: Debt, Savings, Investing, Real Estate, and Crypto

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The new year is right around the corner so I thought it fitting to layout some resolutions for a few different financial topics. Here are financial resolutions for crypto, investing, real estate, savings, and debt.

Debt

Pay down or pay off your debt. If you have credit card debt, make it a goal for next year to pay it off completely. The interest rates that credit card companies charge are so brutal. Getting rid of credit card debt would relieve a lot of stress and save you a lot of money that you’re wasting on interest. Not to mention, whatever you’re currently paying towards your credit card can be used for something way more productive.

If all you have is a mortgage, make extra payments. If you have no debt, congratulations! Try and save more so there’s no chance of you going into debt again.

Savings

Would you like to buy a house next year? Save for your down payment. The bigger your down payment is the smaller your responsibility will be; in terms of monthly payments and in terms of total money owed. Especially if your down payment is 20% or more. If that’s the case, you don’t have to pay mortgage insurance (AKA PMI).

If a down payment isn’t something you need to save for, increase your savings rate for retirement. Or set yourself up to cover some unexpected expenses by creating an emergency fund. Do some math, establish a goal number (emergencies, down payment, retirement savings), and then create a plan to save and hit that number.

Investing

For the most part, investing will take place in your retirement account. And for most people, the amount of time you have until retirement is a couple of decades. With that said, you can be a little more aggressive with your investments.

If this description doesn’t fit you, then figure out what works for you. Determine your time horizon, risk tolerance, and what you’d be able to tolerate in terms of short-term losses. If you’d like to get a good idea about what your preference is, take our risk tolerance quiz.

Real Estate

This one is a little challenging because it’s not like you’re going to move once per year. Also, investing in real estate isn’t for everyone. So I’m going to try and hit a few groups with this one.

Buy a new home. If you need more space for your growing family, you got a new job that requires relocation, you want to be closer to your church or family members, then make a move.

Make improvements to your current home to increase the value of your home or to make better use of the space. It can also improve tax credits especially if you use sustainable materials like solar panels. Either way, the improvement has a positive effect on your living situation.

Most people can invest in real estate, they just do it differently. Some people are going to invest in physical properties and some can invest in Real Estate Investment Trusts (REIT). Either way, you need to be picky (like all investments) so you get a good return on your money.

Crypto

This applies to everything in this post, but especially here…do your homework. I like crypto. I think there are investment opportunities, but I also think there’s a possibility it all collapses. I like the technology it’s created on, but I don’t know how it’ll transform and what the adoptability will be. Invest only what you can afford to lose is my best advice. With all that said, make financial resolutions to get more educated about cryptocurrencies and the blockchain.

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Disclaimer:

**Securities offered through Securities America, Inc., Member FINRA/SIPC. Advisory services offered through Securities America Advisors, Inc. Securities America and its representatives do not provide tax or legal advice; therefore, it is important to coordinate with your tax or legal advisor regarding your specific situation. Please see the website for full disclosures: www.crgfinancialservices.com

Down Payment, Rainy Day, Be Prepared

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rainy day

During the month of June, I wrote an article Down Payment or Investment Opportunities. It was my perspective on what to do with my savings, as I want to buy a home as soon as possible, but I also saw incredible opportunities to make money in the stock market.

Review a previous post

I thought I would revisit this topic, but my mindset shifted a little bit. That’s not to say that I’m proceeding in a different way than I thought I would, but now I’m thinking about it differently.

In that post, I said that I wanted to save $25,000 (I think) for a down payment, and wanted to do it in 4 years.

That meant that I would have to set aside a decent chunk each month to make that a possibility. The caveat to that is I would forego many chances to put money to work in the stock market.

Saving money for a down payment versus actively participating in the market is not the smartest financial decision (in my opinion), but in terms of what’s best for my family and for my psyche, this is the right move.

Because I have conviction in my decision now, my “regret” for not participating in the market has gone away.

When I first made the decision to save for a home instead, I often felt regret because the opportunities to make money were so great. Just from when I wrote that post (June 17) to now, the S&P 500 index ETF (SPY) is up 7.5%.

But I know this is the right choice, so I’m better able to focus my efforts on this goal. I’m eating out much less, I reviewed my budget to see where I could save more, and I’m finding bargains or buying second-hand items where I can.

Rainy day

While we are on the topic of saving money, I want to stress the importance of having some set aside for a rainy day.

As we’ve seen over the past few months, life can get pretty ugly. Now economic and humanitarian events of this scale don’t happen very often, but that’s not the point.

What I’m trying to convey here is that life is unpredictable. You don’t know what’s going to happen, or when. You don’t know how bad it’s going to be, so it’s important you have something set aside if things do get bad.

What’s more, it’s clear that the majority of businesses and corporations don’t have hardly any money set aside when disaster strikes. We like to think that if we put our time and energy working for a company, that they’ll take care of us when the time comes, but it’s clear now that most businesses won’t do that. They’ll protect the bottom line, and that’s that.

Obviously, not every company is like that, but I think it’s safe to say that the majority of organizations operate in this fashion.

Now, I do believe that this event will change how businesses operate. They’ll back away from the lean and mean operations, and start focusing on supply chain redundancy, as well as paying a little more for the security of their products and their people.

Be prepared

What I’m trying to say here is you need to look out for yourself and your family first. Sometimes, it’s necessary to forego big vacations, big expenses, or take out.

I think there’s room to be optimistic but also plan for the worst. I think it’s necessary to do both.

Living a life full of optimism is great, but you become a deer in the headlights when something bad happens. Taking the other side of things, being pessimistic, turns you into a cynic, and that has to be a depressing way to live.

Find room for both. Expect the worst, hope for the best, and save for a rainy day.

Related reading:

Everything You Need to Know to Set Up Your Own Emergency Fund

Down Payment or Investment Opportunities?

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Down Payment or Investment Opportunities

The current dilemma I am having is whether to stash my savings for a down payment on a house or contribute to my Roth so I have cash available for buying opportunities.

I’m pinching pennies, and I’m saving money wherever I can so that cash is accessible when I need it. I just don’t know what to do with it.

Do I put it towards a down payment or set it aside for investment opportunities. Like most things in life, the answer will lie somewhere in the middle.

Down payment

I’ve mentioned in prior reflections that I’m renting right now.

I’m renting because I got divorced and exhausted all of my savings on the down payment for my house. That house is currently being rented by another family, and my ex-wife and I still own it.

That’ll help build equity into the house so we receive more if/when we decide to sell, which is good.

I’m happy with my current living arrangements. I like the place. I like the neighborhood. My commute to work is 2 minutes, and I’m close to all of my family and friends. All good things.

The only bad part is I have no outdoor space to call my own. I have no yard.

I’m trying to frame it positively by saying that I’m not spending my time on yard work, and instead, have more time to spend with my son/work on myself when he’s not here. These are both very good things.

However, I want to give my son a space to play. A place to put a jungle gym and a sandbox. A place where he can just run around and have fun.

I want to give him that because he deserves it. I want to use my savings for a down payment on a house so we can have a place to call our own. 

Investment opportunities

Here’s the second part of my dilemma. I see a lot of chances to put my money to work in the market.

I’m able to play the long game because of my investment philosophy and my training. The best investors I have long-term time horizons.

What I mean to say is I can see past the present and I have an idea of what my investments can do over the long term, and the [possible] reward for investing now can’t be ignored.

That’s why I’m having a difficult time deciding what to do.

What will I do?

As a parent, you want to give your kids everything. I want to have a place we can call our own.

At the same time, I know how valuable it is to start saving and investing early so I can take advantage of compounding returns.

So here’s what I’m thinking. I’m going to develop a “savings plan”. I’ll take the dollar amount for an ideal down payment and how far in the future (in terms of years) when I’ll want to use it.

I’m thinking of $25,000 for a down payment and four years until I’ll use it. I’ll, then, divide $25k by 48 to get my monthly savings goal. Anything over that number I’ll put in my Roth.

That’ll take care of saving for a house and for retirement.

My Last Reflection:

My Experience with Life Insurance

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