How to Save Money to Build a House

Move to a more affordable residence while saving for your new home.


Building the home of your dreams from the ground up means you'll get to mold the project from beginning to end. But with this also comes the potential for unexpected expenses and going over budget. Saving money before you build will give you financial security to cover all of your design whims in your new residence. The home design itself will affect the overall cost of the project. Finding ways to lower the cost of the house means you won't have to save as much before breaking ground.

Step 1

Calculate the amount of money you'll need to save to build a house. If you are financing the project with a loan, you'll probably need a down payment. Keep this amount in mind to help you track your progress in your savings.

Step 2

Open a savings account specifically for money that will go toward building the house. This will keep the money separate from savings you have for other purposes, allowing you to better track your progress toward the amount you need. Set up an automatic deposit into the account at set intervals, such as once a week.

Step 3

Review your household budget, looking for places you can cut back to free up more money. Any extra money you can save in the budget should go to your house-building savings account.

Step 4

Move to a more affordable living situation now, even if it means going smaller. Put aside the difference between your old housing cost and your cheaper housing costs to save toward the new house. The living arrangements are only temporary and can get you to the point of building your new house faster.

Step 5

Start a second job, with all of the income going toward building a house. While the job will take away from your free time, remember that it is only temporary to achieve the savings needed for the house.

Step 6

Research land costs in different areas where you want to build. Choose a location that offers lower land prices to save on the overall house project.

Step 7

Focus more on the size and layout of the home than upgraded finishes if you're trying to save money overall. Upgrading certain features in the home down the road is generally more cost effective than adding onto the house if you decide you need more space after it is built.

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