Updated: Sep 10, 2023

9 Ways to Save Money for a Down Payment During College

Stay ahead of your classmates and save for a house in college. Check out these 9 great house down payment strategies for college students.
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While it's true that many college students are broke and graduate with a considerable amount of debt, it isn't impossible to save during these years -- especially if you have a part-time job or work over the summer and holidays.

Well, what if you decided to focus on coming up with some solid house down payment strategies while you’re still in college?

After all, you’re going to have to live somewhere after you graduate.

So, why not put a down payment on a home instead of renting? 

The money you would be applying to rent will put you on the early road to building equity.

Certainly, having such a vision, when you’re facing mounting tuition costs and student loan debt, would require a high level of maturity, not to mention sacrifice, but it can be done.

It was said that legendary investor Warren Buffett made his first real estate investment buying 40 acres of farmland with $1,200 in savings -- when he 14 years old.

So, what’s stopping you from starting your own fund?

You just need laser-like vision and a handful of great house down payment strategies to get started. Here are nine:

1. Save by Attending a Community College Your First Two Years

You’ve decided to go to college, so that’s a smart move, but no one said you had to start out at a four-year institution.

The clear reason is cost.

Four-year college institutions cost double or triple what two-year colleges charge, depending on whose statistics you’re reading, but the value of what you’re learning those first couple of years at a four-year college is hardly double that of a community college.

Your first two years in college you’re largely testing the waters and getting prerequisites out of the way, so you might as well do it as cheaply as possible.

Take a fraction of what you’re saving by attending community college and put it toward your house down payment fund.

This kind of savvy move will earn you a doctorate.

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2. Cut Back Your Textbook Costs by Half or More

Again, there are all kinds of statistics on this topic, but it’s safe to say you could easily spend $1,000 a year if you bought all the textbooks listed on your professors’ syllabi.

Fortunately, you don’t have to.

A recent study by the U.S. Public Interest Research Group, a nonprofit consumer advocacy organization, reported that seven in 10 college students said they had not purchased a textbook at least once, because they found the price too high.

They took alternative measures.

For example, they know that professors often list books on their syllabus without any intention of using them.

The book is there simply to fulfill a university mandate.

Also, many books you actually will be required to read now appear as eBooks, which cost a fraction of their perfect-bound brothers.

Other professors may save you cash by steering you toward free sites that publish peer-reviewed open-source eBooks.

These books are extremely practical for basic subjects that don’t require new editions.

Two plus two will always equal four, so you hardly need a new edition to explain that concept.

Again, reward your thrifty book-buying and new frugality by putting some of your found money into your house down payment fund.

3. Take Extra Units

Once you figure this school thing out (taking the recommended 13-15 units the first quarter of your freshman year), what’s stopping you from loading up on a few extra units?

At many schools, tuition is the same whether you take 15 units or 20. It’s doable because you’ll get the scoop on the easy classes and also the ones to stay away from.

By graduating a quarter or semester early, take that money, once earmarked for tuition and put it toward your house down payment.

4. Lose the Wheels

You’re not back in high school, when you spent more time parading in the student parking lot in your tricked-out Toyota Celica than attending class.

You’re in college now, with a new mission to save up for a house down payment. So ditch the car.

To run that beast, you (or mom and dad) have been paying about $9,000 a year, if you factor in average car payments, gas, insurance and maintenance.

When you’re in college, you don’t need a car or the monthly costs it takes to park that car, either.

You’re there to study, not cruise.

And when you do need transportation, use the public variety. If you have a hot date, borrow a friend’s car.

Here’s the skinny -- by giving up your car, you’re going to save a chunk of dough, part of which you could apply to your house down payment fund.

5. Get a Job

You don’t necessarily have to sling hash or clean up after food fights in the dining hall. The burnout factor is too big.

You need to find work that you might actually like and be able to sustain over two or four years.

Universities are job-rich, research-heavy environments with all kinds of labor slots that need to be filled.

Somebody has to feed the monkeys and rats that are being studied and analyzed to produce the next great medical cure.

If you’re pre-med, what could look better on your resume!

Perhaps, you’re a drama student. Somebody has to look after all those regal garments used in the drama department’s spring adaptation of “Hamlet”or “King Lear.”

There is actually a name -- petticoat wrangler -- for this coveted position.

At Tufts University, you’re paid $10-$12 per hour to maintain and care for the drama department’s costume stock, plus making and keeping appointments with designers looking to borrow, rent and return costumes.

Take 10 percent of what you earn and stash it in your down payment fund.

Look at it this way, 10 percent is just one penny out of every dime.

You’re the paymaster, so always pay yourself first.

6. Get a Summer Job, Too

Summer vacation isn’t the time to catch up on episodes of “How I Met Your Mother.”

Well, it is, but if you’re intent on saving for a down payment, summer is your opportunity to earn some real money without a college paper deadline hanging over your head.

If you can’t land the high-paying union job digging ditches, don’t just pack it in for the summer, take on freelance writing assignments, wait tables, house sit, mow lawns, paint houses, walk your neighbor's dog…

7. Live at Home

Part of the college experience is living on campus.

But living on campus means you’re living in the high-rent district, where room prices are usually a lot higher than any amount your mom and dad might charge, which is usually free.

So, if you live close enough to your hometown university, consider all the advantages of living at home.

Your mom and dad might even volunteer to do your laundry, saving you a few extra quarters.

Sure, you’re giving up a lot, but if you take a portion of what you save and apply it to your down payment fund, it will all be worth it.

8. Ask for Cash

For birthdays and other special occasions, let it be known among your favorite gift-givers, that you would rather have straight cash than a nice-looking tie or three-pack of silk boxer shorts.

Clothes are out, cash is in.

Your announcement might sound a little cold or crass, but when your family understands that you’re saving for a down payment, they’ll see your genius and admire your vision.

Tell them they'll all be invited to your upcoming housewarming.

9. Open a High-interest, Online Savings Account

Before you dutifully begin stashing your down payment funds away, consider opening a high-interest online savings account -- many of them are completely free and give you decent interest rates.

In addition to gaining some extra money just for housing your money in one of these accounts, it can also work as a motivational tool -- if you have an account set up just for a down payment, it may serve as a constant reminder that you need to continue diligently saving. See what the latest online banks are offering below.

How Much of a Down Payment do You Need?

There’s no set answer, but talk to a lender who can at least give you a snapshot of what you’ll need.

Run some scenarios on the MyBankTracker mortgage calculator.

A traditional down payment requires 20 percent, so if you’re looking at a $100,000 home, you’ll need a down payment of $20,000.

One hundred thousand dollars for a home in California likely won’t get you a cup of coffee in the Golden State, but it will in some areas of the country.

And that’s the bigger point.

Starting out, Warren Buffett didn’t purchase 40 acres of prime Manhattan real estate.

Rather, he bought 40 acres of pedestrian Nebraska farmland.

Also, knowing what doors your down payment will help open in different parts of the country will help direct you to a city (after you graduate, of course), where the jobs are plentiful and the housing is affordable.

Why rent when you can own?

It requires a special vision, but if you want to be the atypical college student -- somebody who is a big-thinker -- a house is definitely in your future.