Finance Experts Spill the Best Ways to Save Money for a House or Car (2024)

Early in the game is a perfect time to think about a lender, as the right choice could save you as much as half a percent, according to Bobbi Rebell, certified financial planner and host of the Financial Grownup podcast. “One easy way to save on a mortgage rate for a house is to agree to have the payments taken directly from a bank account at the same institution that is lending you the money,” she says. “The bank avoids transaction fees and passes along the savings.” She also says that you can be rewarded for doing business with that bank on multiple levels, especially if you are a "priority client" with a large amount of assets.

While you’re saving, it’s a good idea to make efforts to improve your credit score – 720 or higher is ideal. Why? According to Shannah Compton Game, a certified financial planner and host of the Millennial Money podcast, a healthy credit score can save you thousands of dollars in interest over the years of your loan. “For example, on a $300,000 purchase price with a 30-year loan at four percent, your payment would be $1,954,” she says. “Raise that interest rate to six percent, with an unhealthy credit score, and your payment would be $2,320, which is a whopping $131,760 over the life of the loan.” Compton Game recommends improving your score by making on-time payments and keeping your credit utilization to 30 percent or less.

If you’re under 59-and-a-half, you’re probably thinking that your IRA is off limits due to the penalties you’d incur, but that’s not always the case. “One exception to IRS imposed penalties is the first-time homebuyers withdrawal up to $10,000,” says Victoria Shtainer, a realtor with the Victoria Shtainer Team at Compass. "However, consult your tax advisor to understand the implications of this withdrawal on your retirement goals as well as the tax implications for your personal situation."

When saving for a big purchase, Pelka pairs saving money with his fitness goals, charging himself a $5 bounty whenever he skips the gym. “This has been phenomenal as a motivating factor to both go to the gym, but also to save more money any time that I skip,” he says.

Speaking of fitness, that gym membership or those fancy fitness classes you’re taking can really add up. According to Shtainer, in New York City, a premium gym like Equinox can cost upwards of $250 per month, while individual classes at boutique fitness studios can cost up to $40 for a single class. “Consider foregoing the pricey gym membership and utilizing workout videos on YouTube, or look for deals on classes through things such as Gilt City and ClassPass,” she says.

Are you spending money on something that a talented friend could do for you? Maybe there’s something you could do for them in exchange. Jamila Souffrant, certified financial educator and host of the Journey to Launch podcast, suggests exchanging your talents with someone else and socking those savings away.

If you have no wiggle room in your budget, it might be time for a side hustle. Mikey Rox senior writer at money-saving site Wise Bread, saves all his earnings from his side hustle with Instacart, the grocery shopping and delivery service. “I have my weekly earnings direct-deposited straight to my savings where I set it and forget it,” he says. “This tactic has helped me save at least $1,000 per month over the past six months.” If you need to live on those earnings, Rox suggests socking away the tips instead.

Have you checked your recent credit or debit card statements? Shtainer points out that the most common addition to monthly expenses today are streaming video services, like Amazon Prime, Netflix, and Hulu. “All these services offer video streaming so why pay for all three if you are looking to save money for a down payment? Select one service that checks the most boxes for you and nix all the others. Small changes can result in sizable savings over time,” she says.

Business News Daily reports that 61 percent of shoppers purchase one to three extra items whenever they shop. If you’re an impulse shopper, Andrea Woroch, a personal finance expert working with Marcus by Goldman Sachs, suggests breaking this habit by identifying your triggers. “Figuring out how to manage your emotions in different ways and avoiding stores that tempt you to buy things you don’t need are ways to avoid these specific triggers and dodge those impulse buys,” she says. Whenever you avoid this kind of spending, sock that money away.

Sometimes it’s hard to go it alone. Marshay Clarke, a certified financial planner at investment platform Betterment, recommends enlisting a friend or family member to be your savings buddy. “Tell one another your monthly savings goal and check in every few weeks," she says. "You’re more likely to hold yourself accountable to your goals when you know you have to share your progress with someone else."

“Learn about whatever you're saving for,” Tara Falcone, and founder of personal finance blog, ReisUP. “If you're saving up for a car, for example, commit to learning things like how to change your own oil, how to change a tire, or how to use jumper cables to revive a dead battery. If buying a house is your big goal, learn about the housing market in your area or what renovations and improvements add to a home's value.” Falcone suggests that aligning your habits and knowledge with your goals keeps you committed and makes for more successful ownership in the long run. Plus, your new skills will come in handy down the road!

And if you’re not on the market for a house or car, now is a great time to plan! Souffrant suggests that saving for big purchases well in advance makes the process easier. “Maybe your 10-year-old car works now, but in another seven years, you’ll need another,” she sad. “Saving 10,000 to buy a car in seven years only requires you to save $119 a month over the next seven years versus trying to come up with $10,000 in one year.