Saving for Your Down Payment: 6 Helpful Strategies

A model of a house sitting on stacks of bills.

Owning your own home is an exciting prospect, but saving up enough money for your down payment isn’t always easy. Typically, buyers will need to put down 5 – 20 percent of a home’s value when purchasing a property. To help you get closer to buying your dream home, Tennessee State Bank has put together six tips for saving for your down payment.

1. Draft a Budget and Timeline

It always helps to have a clear plan when you’re saving up for a big purchase. First, figure out how much money you will need for your down payment. Then, determine how much you can realistically save each month and how long it will take you to reach your goal. With a budget in hand, you will know exactly what you need to do to stay on track.

2. Start a Designated Savings AccountA savings jar for a down payment.

Rather than keeping the money designated for your down payment with the rest of your savings, we recommend establishing a separate account. This way, you won’t be tempted to raid your down payment cash if you are running low on funds. Another trick for fighting your worst impulses is making the contributions to your down payment account automatic.

3. Reduce Your Monthly Expenses by Shopping Around

As you save for your down payment, you will want to see if there are other monthly expenses that you can cut back on. Be on the lookout for lower rates, deals, or promotions that could save you money on your health insurance, car insurance, renters insurance, cable/internet bill, or cell phone plan.

A smiling man using a smartphone.4. Keep Track of Your Spending

Online and mobile banking have made it easier than ever before to monitor exactly how you are spending your money each month. Download the Tennessee State Bank App, and try to pinpoint which discretionary items are eating up your paycheck. Cutting back on daily coffee runs or eating out for lunch will leave you with more money for your down payment.

5. Look into Tennessee’s Down Payment Assistance Programs

The Tennessee Housing Development Agency offers down payment assistance programs for qualifying buyers. In 2017, the Great Choice Plus program provided an average of $7,144 in down payment assistance to Tennessee homebuyers. The THDA also offers an HHF-DPA program, which provides $15,000 in down payment assistance for homes in qualifying ZIP Codes. For more information, visit the official Tennessee Housing Development Agency website.

6. Reward Yourself for Reaching Savings MilestonesA couple enjoying dinner in a restaurant.

Don’t be afraid to celebrate a little as you make your way closer to your savings goals! We suggest planning a small reward for yourself as you reach significant savings milestones. For instance, when you hit $5,000 in your down payment account, go ahead and enjoy a nice dinner out on the town. These rewards will help you stay motivated as the months go by.

About Tennessee State Bank

Tennessee State Bank has been serving our local community for over 45 years. With branches in Sevier County, Knox County, Cocke County, and Jefferson County, we offer convenient banking services in East Tennessee. Whether you’re looking to open a checking account, obtain an auto loan, or apply for a home mortgage, we make the process as simple and straightforward as possible. Tennessee State Bank’s motto is “Banking at its Best!”SM, and we strive to live up to that creed every day. Let us know how we can help you by sending us a message via our Contact Form.

Tennessee State Bank is Member FDIC and an Equal Housing Lender.


“6 Tips for Saving for Your Down Payment.” American Bankers Association,