7 Spending Habits Quietly Killing Your Progress Saving for a Home
It's hard out there for an aspiring homeowner, but certain habits make you into your own worst enemy.
Saving for a home can feel out of reach for Gen Z and millennials, especially in today's housing market. Even though rising prices and a shaky economy are partly to blame, everyday spending habits can make or break your timeline to a home purchase.
Experts offered us a close look at the spending habits most likely to keep you from home ownership.
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Saving What's Left Over Instead of Prioritizing It
One of the most common mistakes future homebuyers make is treating savings as an afterthought rather than a fixed expense.
"Many people underestimate how much of their income is already spoken for," said Julia Bartak, a CFP with Edward Jones. Without a clear budget plan, she warned, people can be unpleasantly surprised.
"If one truly wants to make savings a priority, it cannot be a residual … it should be a line item on your budget," said Robert R. Johnson, a professor of finance in the Heider College of Business at Creighton University.
Letting Lifestyle Creep Absorb Extra Money
As income rises, spending often does, too. While it may feel like progress, it can prevent people from building the savings needed for a home, Johnson said.
This kind of lifestyle creep is often driven by a "you only live once" attitude, Johnson said, which can push long-term goals like homeownership further down the road.
Overlooking Convenience Spending That Adds up Fast
Small, frequent convenience spending can also be damaging to long-term savings goals, according to Bartak.
"Food delivery, ride shares and small digital subscriptions add up quickly," she said
These habits not only drain your paycheck quickly but can delay homeownership by years, she warned.
"When hundreds of dollars each month go toward discretionary purchases instead of savings, it becomes much harder to build the kind of down payment that makes buying a home realistic," she said.
Thinking Saving 'Counts' Only If It's Aggressive
Another common trap is the belief that if you cannot save large amounts, it is not worth saving at all. "That mindset delays progress far more than modest, consistent contributions would," Bartak said.
Johnson said it's a challenge for some people to imagine their future self "and give up that vacation or new car today in lieu of having money for a down payment on a home." But that's what it takes.
Setting Unrealistic Spending Rules That Backfire
Trying to overhaul your finances overnight often leads to burnout and eventually, your money resolutions "are doomed to failure" Johnson said. "People set unrealistic spending targets and, like fitness goals, abandon them completely."
Instead, he suggested adopting a balanced budgeting approach, such as the 50-30-20 rule.
Not Tracking Spending or Automating Savings
Without systems in place, it is easy for good intentions to fall apart, Bartak warned.
"Reviewing spending for even one month often reveals opportunities to redirect funds toward savings," she said, and pointed to automation as a powerful tool. "Automatically transferring money into a dedicated savings account each month removes the temptation to spend it and helps people build progress consistently."
The key is to make saving money a habit, Johnson said, "And habits, good or bad, develop over time."
Not Setting Realistic Targets or Milestones
Saving for a home can feel especially overwhelming when the total goal is large. Without smaller milestones, it's easy to lose motivation.
"A helpful starting point is saving around 15% to 20% of income toward major financial goals," Bartak said. Even if someone cannot reach that figure right away, building the habit of saving consistently each month is more important than the exact percentage, she said.
While today's housing market presents real challenges, many of the biggest barriers to homeownership are within people's control.
"Homeownership can feel overwhelming for younger buyers," Bartak said. "The good news is that progress does not happen all at once."
This article was provided by MoneyLion.com for informational purposes only and should not be construed as financial, legal, or tax advice.
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