5 Money Lessons You Can Learn From People Who Bought Their Own Homes in Their 20s

If you’re under 30, buying a home might sound like a far-fetched dream: Fewer people between ages 25 to 34 are buying homes now compared to older generations at that age, according to a July 2018 report from the Urban Institute. And if you’re dealing with student loan debt, you might find yourself feeling particularly swamped: According to an October 2018 report from Magnify Money, a LendingTree-affiliated site, millennial households with student debt have accumulated, on average, $85,289 less wealth than their debt-free peers.

But despite this, many millennials are, in fact, buying homes. Though 54 percent of urban home buyers did so with gifted funds, many people under 30 have achieved the American Dream with their own money—even with student loans.

How are they so good with money? Instead of postulating, I went straight to the source: I spoke to a dozen people who purchased homes before 30 about their best money tips. Here, the five most common pieces of advice:

Ashley Auwerter was a 21-year-old single mother when she bought her first home for $99,000 in Rapid City, South Dakota, in 2008. Even though the bank told her she qualified for a $160,000 mortgage, she knew that price was too high for her budget. “I didn’t want to hate my mortgage payment,” she says.

It’s hard to predict life, but try to find a mortgage payment that leaves room for unexpected changes. Alexandra Collins bought her first home with her husband in Seattle, Washington, at age 26 when she was working at a big tech firm. Now that she’s started her own business, the mortgage on their $433,000 home no longer makes sense for their budget.

“A big lesson is not getting locked in a situation like we did if you think or you know your circumstances will change,” she says.

Sometimes, not hating your mortgage means settling for a home that’s good enough. In 2011, Allison Driscoll, a Realtor, and her husband bought a foreclosed condo for $63,000 with a 20 percent down payment when she was 23. The couple made some concessions to buy something affordable:

“The walls looked like someone had smoked for 100 years in the house. White and yellow sponge paint on everything,” she says. She and her husband have since sold the condo and bought a new house, using the profit from their former condo as part of the down payment.

Beth Jones bought a fixer upper home at age 25 and renovated the entire interior. Now done with the renovation, she can enjoy her home and the value she built into it. “After everything was done, I built in about $60,000 worth of sweat equity. I saved a very large amount doing the renovation route rather than buying turn-key,” she says.

A lot of the young homeowners I spoke with worked extremely hard on top of full-time jobs to save the money for their homes.

Liz Enriquez from Hamilton, Ontario, worked as a social media manager on nights and weekends after her labor market analyst job. “I was working like 12 to 14-hour days,” Enriquez says. “I pretty much doubled my income through my side hustle, which is now my full-time job.”

The extra work paid off. She put down a 20 percent down payment to purchase her $240,000 home in 2016 at age 24.

Though some people may stay away from racking up credit card debt, many of the young homeowners I surveyed said that they used benefits of credit cards to save cash monthly:

As a single mom, Auwerter sometimes uses credit cards to make bigger purchases. “The only time I use them is with a 0 percent APR promotion,” she says. “I take the total and divide it by the promotional terms. So, if it was 21 months, I’d divide it by 21 and that’s my monthly payment.”

Lance Cothern, who bought his first home at age 24 in Panama City Beach, Florida, shares 23 credit cards with his wife but never carries a balance. “If you have the discipline and you know you’re not going to use your credit card more than you would paying with cash or a debit card, I’d say go for it and take advantage of the rewards offered,” he says. They recently used rewards to take their son on a free trip to Disney World.

You may want to pay off your student loans before you take out a mortgage, but many people I surveyed still had student loan debt when they bought their first home. They’re not alone: A recent report from the U.S. Department of Housing and Urban Development found that people are taking on FHA loans with more debt (presumably those from student loans). Additionally, in June 2018, a CoreLogic analysis found that conventional mortgage lenders were overall easing approval requirements.

And though student loans may be annoying and expensive, they might actually help you save money in mortgage interest over time. How? Making consistent student loan payments actually helps drive up your credit score. For example, Driscoll built hers by making regular payments to her $75,000 worth of student loans and keeping the same credit card since college.

Cothern didn’t have student loans, but his wife accumulated $80,000 in student loans from nursing school. Using the rule that rent should be roughly a third of his income, he found cheap rent and saved the difference. “Rather than spend that money on something else, I took the difference and put it into a savings account every month,” he says. This method helped him save enough for his first home down payment and make consistent payments towards his wife’s student loans.

Buying a home can be daunting—and expensive—solo. Kate Ziegler, a Boston-based Realtor, and her partner, Jack Romano, purchased a four-unit multi-family home together in Boston, Massachusetts, when they were 28 and 29. They did most of the renovations themselves. Even together, it was a lot to take on. “I can’t imagine having gone through our first purchase as a single person,” Ziegler says.

Caroline Schmitz, a senior account executive from Nashville, Tennessee, bought a $198,000 fixer-upper home independently, but her boyfriend, Justin, who had a background in construction, helped with the renovations. “We found a home with good bones and a bad kitchen and put all of our efforts into renovating the kitchen and the bathroom where most of the equity lies,” she says.

If you don’t have a partner, family support can also help you achieve homeownership—even if they don’t have the cash to help with a down payment. Christina Fowler was working as an online stylist and doing freelance marketing when she bought her first home in Sacramento, California, in 2017 at age 24. Although she was only approved for a $180,000 home, she ended up buying a $285,000 house because her parents co-signed the mortgage. “I plan to refinance to a more conventional loan without my parents on it as soon as I can,” she says.

And you can make your mortgage even more affordable by “househacking,” too. Lindsay Krämer, a freelance writer, and her husband bought a $325,000 multi-family home in 2018 that helps them pay their mortgage. The other unit of their two-unit home in Bloomfield, New Jersey, currently rents for $1,250. “The rent they pay basically cuts our mortgage payment in half,” she says. “If we were funding this house by ourselves, we would be strapped every single month. We wouldn’t able to save.”