This Week on Liz$plaining: Everything You Need to Know About Saving Up for a Down Payment

published Jul 23, 2019
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Hello, friends. Welcome back to Liz$plaining, Apartment Therapy’s personal finance series that promises to accept and respect your financial decisions—always—whether you’re diligently stashing away your cash or deciding that, hey, you’re okay with having a little credit card debt this month. We’re releasing our fourth episode of the series today, and if you you’re not up to date, you can binge-watch all recent episodes of the series right now to catch up! This week, I’m talking about what you need to know about saving up for a down payment to buy a house.

Purchasing a home is something that many—if not most—people want to do in their lifetime (although it’s totally okay to not want to be a homeowner!). However, you may have realized, not everyone who wants to owns a home actually does, especially if they’re a Millennial. Why? It’s not because they can’t afford the monthly mortgage payment—it’s because there is a barrier to entry for mortgages in the tune of thousands of dollars, a.k.a. that pesky down payment. On average, it takes about six and a half years for someone to save up for a down payment. And that’s even including all the people who split that massive sum with a partner or receive help from family.

For a lot of people, it takes a lot longer, especially if you’re doing it all on your own in a city that favors people with higher incomes. But that doesn’t mean you shouldn’t start trying now. Last week, we published a great essay from Brittany Anas about how the phrase “Don’t let perfection be the enemy of the good” changed her life and ultimately helped her achieve some of her lofty goals. I definitely think this works for finance, too. Much like training for a marathon or watching all six seasons of “The Sopranos” in two weeks, saving up for a down payment starts with intention. You may think people who save are “good” at saving—but I don’t think that’s true. I think that they’ve just told themselves that despite having a million totally valid excuses not to, it was time to start building that nest egg. Then they probably did something totally manageable like setting up a $25 automatic transfer from checking to savings from every paycheck or researching higher-interest savings accounts (watch the video above to get more ideas!).

Also, when it turned out that their savings plans weren’t working, they probably didn’t quit, but instead restrategized. A little known fact for ya: Saving is not as fun as spending, and therefore, saving up thousands of dollars is really, really hard—especially when most people don’t have much extra money for saving to begin with. I personally know how much more thrilling it is to buy something I can derive pleasure from right now than to transfer that money into my savings account. You will spend more than you want to during your savings journey—and that’s okay! Accept that you’re human and that that opportunity to get floor seats for your favorite band is too good to skip. But don’t let that discourage you. If you find out that your original plan isn’t working, don’t quit—just restrategize. Most likely, the longer you save (and the more challenges you overcome!) the easier it will be (and maybe even the more driven you’ll be!) You got this!

Have any inspiring saving stories you’d like to share? Let me know in the comments! (And thanks again for watching!)

Liz Steelman
Real Estate Editor, Apartment Therapy

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