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How to Save Up for a House Down Payment

Feb 18, 2024

Hello Stoic Investors,

Today I'm going to show you how to save up for a house down payment.


How do we understand how to save up for a house down payment? Do we need to use some complex

formula and calculations?

Absolutely not.


It's literally just a matter of planning approximately what will happen in the future, which means starting from

asking ourselves some questions.


1. How much will the house I buy cost?

I'm not asking you to think about the exact amount.

But surely you will have an idea whether you're going to buy a house around $200,000 or $1 million, based

on your income, your desires and how many people will live in this house.


So, considering all these types of things, you should have an approximate idea of how much money your

house will cost.


But if you totally have no clue about that, Google is your best friend.

You can start by searching, for example, the average house price in your country.


Let's say, for example, that we plan for a $400,000 house to buy.


2. How much will be the down payment?

This will depend partially on your goals and what your state offers.

In general, for example, if you are a first home buyer there are some advantages that can make your down

payment amount slightly lower.


Again, if you can’t answer this question, you can simply search on Google the average down payment

percentage for a house in your country.


You don’t need to be precise, because we can't be sure about the future.

No one knows what will happen, so you don’t need to plan in the most accurate way with complex

calculations, because even a small single change in one assumption can reshape everything.


So, going back to our example, let’s say that the down payment percentage is 7.5%.

Therefore, we want to buy a house that costs $400,000 and the down payment percentage is 7,5%.


From this data we can get our first important amount, that is the money you need for the down payment,

which is $30,000 in this case.

Now we have a goal, we aren’t just saving money for the house without even knowing where we are going.

We know that $30,000 is our goal. And so, this is our starting assumption.


3. When do I plan to buy the house?

Again, you don’t need to be too accurate, but you may know approximately whether it's 6 months or 5 years

from now, depending on where you are.

But overall, let’s say you plan to buy a house 5 years from now.

This is an important question to ask yourself, because, based on the answer, you can understand the

amount of money you need to put aside every year in order to buy the house.


And therefore, in this example, if you want to save $30,000 for a down payment to buy a house in 5 years,

you need to set aside $6,000 each year.


Finally, we have all the necessary data:

You’ll need to accumulate $6,000 per year, and if you want to know the needed amount to put aside every

month, you can just divide $6,000 by 12.

Simple, right?


But now, let's imagine a different scenario.

Let's say that you want a house that is $800,000 instead of $400,000, but you want to invest only $500 per



What happens?

That the down payment nest to accumulate in 5 years becomes too much.

You're actually not accumulating money; you are losing them, because if you want to have $1,000 in the

down payment nest and still invest $500 per month, you are not able to do this.


So, what can you do?

First of all, if you want to buy a house that cost $800,000, you need to play with the assumptions.

For example, you could change the down payment percentage, let’s say from 7.5% to 5%, or you can wait

some more years before buying the house, and of course, this will reduce the amount that you need to

accumulate every month.


Sometimes, you may realize that you're unable to follow all your goals together.

You may need to earn more, or be more patient, or even reduce your goals.

This is my general advice for anything regarding money.


Second, don’t just accumulate money in a saving account for the down payment nest.

You can consider using a high-yield savings account as a minimum or to invest this amount in simple

government bonds, which are very safe and can make you earn some more money.


You don't need to risk everything, but of course, if you just accumulate $60,000 in cash for the down

payment, due to inflation you would lose a lot.

So, consider investing them as well.


To make things even simpler I’ve created a budget planner to help me not only keep track of what I've spent

in the past months but also plan for future expenses, and if you think it could be useful to you as well, click

here to download the budget planner.


So, note down these three key points and start investing today:

1.Adopt a planning perspective, meaning to already allocate proactively the amount that you want

for each goal in your life.

2.Ask yourself some useful questions to be prepared for what the future holds

3. Be aware that we can't always stick to our goals; sometimes, we need to adjust ourselves or scale

them down.


See you again next week.


Whenever you're ready, here is how I can help you:

1. Take advantage of all our Free Resources and start your journey as Stoic Investor 

2. Book a Free Consultation to ask your investing questions and we will point you in the right direction

3. Watch hundreds of Video Testimonials of Stoic Money Clients from 25 different countries

About Me

I am Vittorio Rigato, the Investing Coach behind Stoic Money.

I invested for more than 8 years, both for myself and by managing the 7-figures retirement account of my family.

After my Master Degree in Finance & Management, I worked in the FinTech industry in Frankfurt (Germany) and managed financial products with value up to €100 Millions.

In 2021 I have founded Stoic Money to teach employees and professionals worldwide how to invest to reach $1,000,000 Net Worth and beyond. Many of them reviewed Stoic Money service with a video testimonial here.

Multiple Finance News Websites like Yahoo Finance and Euronews talked about Stoic Money mission and services.

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