The lowdown on saving for a down payment for a home

How you can speed up saving for a home to call your own.
Photo: Thinkstock

Saving for a down payment for a home doesn’t have to feel like watching a sports game in slow motion. Innovation can speed up saving for a home to call your own.

Oahu’s median price of nearly $800,000 for a single-family home may require a down payment of $80,000 to $160,000 depending on what a lender requires. While that’s a big chunk of change that may be an instant turn off, know that it can be done with dedication and discipline.

If you are saving money to buy the home of your dreams, consider a starter home for the short term. Getting your foot in the door in a condo in a more affordable neighborhood means that as the home’s value goes up, you can use the equity to leverage yourself into a pricier place later on. All good things are worth the wait. You just have to get started.

There’s no shame in borrowing money from family. In fact, that’s how many fund their down payment. Parents, aunts and uncles know the hardship of affordable housing in Hawaii and often if they have the means, they will help you make an investment in your future.

If you have a mindset that saving is suffering, focus on what you’re spending instead. Online programs make it so easy to catalog expenses by categories and enable your bank account and credit cards to populate the budget in real time. Eating out, groceries and even a daily latte all present opportunities where you can trim the fat and reallocate money to saving for your nest egg. Spontaneously showing up for dinner at mom’s house and packing your lunch could easily save you $5,000 per year. Buying a used car instead of a brand new one can save you even more.

Photo: Thinkstock

Open a dedicated savings account for your down payment and have part of your paycheck directly deposited into it. If you don’t see it, you won’t miss it. Another tactic for growing your savings is to stash away 100 percent of any extra money headed your way. Don’t be tempted to splurge after getting your tax return or work bonus; save all of it. You’ve been living without it, so you probably won’t miss it.

While cutting back on mocha lattes and movie dates will incrementally help you reach your savings goals, major lifestyle changes might be in order to make it happen more quickly. Consider moving into a smaller apartment and skipping vacations. Getting a second job is guaranteed to put money in the bank. While these things might not be fun, temporary sacrifices will pay off in the long run. After all, do you really want to be renting or living with mom at 40?

There’s plenty of creative things that you can do like debt consolidation to reduce or eliminate interest, borrowing from family and some retirement plans even allow you to use money for real estate transactions.

Above all, come up with a plan you can follow. Don’t cut yourself off completely or saving will become so frustrating that you might give up. Make it a rewarding experience – celebrate savings milestones and keep the goal of home ownership top of mind.

Photo courtesy of Danielle Scherman.


Danielle Scherman is a real estate agent and entrepreneur from Kailua. Contact her for more home advice at

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