For millennials and others who’ve spent their entire lives renting apartments, finding money for a down payment is a daunting task. How to save for a house is a rational question to ask, especially when it seems like you are just getting by with your current income.

The median price of an American home in July 2018 was $217,300, according to Zillow. A lender may allow you to put down less than the standard 20 percent of the listed price as a down payment. But putting less than 20 percent down can mean you get less favorable interest rates and pay hundreds more each month for a mortgage.

So if you do aim for a 20 percent down payment, you’ll quickly realize you’ll need to save around $43,000. Not surprisingly for the majority of Americans, whose median annual income is just over $45,000, this might seem like an impossible task.

Learning how to save for a house isn’t as hard as one might think. Sometimes all it takes is revisiting your current budget to make a few small changes. If you accumulate these small changes, over time, it can lead to big results. If you break your ultimate goal of saving for a house down into feasible chunks, it might seem much easier than aiming for the entire amount in one go.

Planning Your Home-Buying Strategy

The most important step toward saving for a down payment is to look at the numbers. Looking at the numbers means exploring your current income and expenditures to improve savings and set realistic goals.

Set SMART Goals

Everyone has goals and aspirations, but unless you flush them out with actionable details, they typically remain lofty and unachieved. What does a SMART goal look like when it comes to saving money for a house?

• Specific: One of the critical parts of a SMART goal is making it concrete. Just aiming to “save money” for “a house” isn’t specific enough. What kind of house do you want? How much will you need? When will you need it? Outline as many details as possible about this goal to make it as realistic as possible.
• ​Measurable: How will you measure your progress? Will you have an Excel spreadsheet, or will you put stickers on a poster? Make sure you've got methods of keeping track.
• ​Attainable: Buying the Fresh Prince of Bel Air mansion might not be an achievable goal for your starter home, but aiming to buy a condo or duplex might be a much more attainable one.
• Realistic: If you aim to save $1,500 a month for a down payment but only make $2,000 a month, this is not a realistic goal. Take a close look at your budget, make small adjustments, and set a relevant goal that is achievable.
• Timeline: When do you want to have enough money saved for a down payment? Set a specific date in the future based on the total down payment you expect and the monthly amount you can set aside.

How to Start Saving for a House

After spending some time detailing your home ownership dream and the specifics about how to achieve it through SMART goal setting, it's time to get serious. It's time to start saving money. If you aren’t a budgeter, or if you’ve never attempted to save so much money in one go before, it's daunting. How to save for a house is a question not usually taught in high school, but it's not complicated. It all starts with small, simple steps. Here are some ideas to get you started.

Idea #1: Pay Down Existing Debt

Technically this won’t help you save for a home, but it will avoid spreading your finances too thin. Plus, having lower debt can improve your buying power. Focus all your efforts on paying down any debt you have. Saving for a house while also paying down debt (that presumably is subject to interest) can feel like running in circles. Adopt some of the following ideas and put that money toward your debt. Once you’ve cleared your credit card debt or student loans, you’ll have that much more money left each month to stash in a savings account.

Idea #2: Sell Your Car

Can you walk, commute, rideshare, or bike to work every day? Many financial gurus recommend selling your vehicle to save money. No more car payments, monthly insurance premiums, gas, or repairs needed. It’s a big decision, but it's one of the easiest ways to immediately save a big chunk of money. Repurpose any of the cash you would have spent on your vehicle every month and place it straight into your savings account.

Idea #3: Pay Yourself First

Once you’ve set a SMART goal and understand your budget, you’ll know roughly how much you can put into savings every month. One common mistake people make is to pay themselves last. After getting your paycheck, you might pay rent, eat out a few times, and pay your phone bill, all before putting money in a savings account. By the end of the month, suddenly there isn’t any money left to save. Try turning the tables around; put your savings account first. You may be surprised that you can still cover all your bills, even if you paid yourself first.

Idea #4: Get a Part-Time Job

Picking up a side hustle, whether it's freelancing as a wedding photographer, pet-sitting, or getting a second job two nights a week, is an excellent way to maintain your current way of life and still have money to put toward a down payment. Even if you only make an extra $100 a week, that adds up to $400 a month or $4,800 a year.

Idea #5: Cut Back on Monthly Bills

Do you really need to pay for cable when everything is available online? Do you need to buy lunch every day at work? What about your cellphone bill? Take a look at your monthly bills and whittle them down to save money. Instead of buying new sunglasses or eating out with that extra bit of monthly cash, put it straight into your savings account.

Saving for a House Doesn't Need to be a Struggle

Nobody said that saving for a house was easy, but many avoid doing it because it seems so monumental. Many young adults feel discouraged when they think about the time required to save up tens of thousands of dollars for a down payment on their first house.

Over time, it’s really the little steps that make a big difference. As the months go by, you’ll start to see your savings account slowly accumulate simply by paying down debt, cutting back on monthly bills, and other ideas from our list.