Ways to Save up for a Downpayment in Hawaii
1. Set Up a Separate Savings Account
For people who find it hard to manage their daily spending while also saving for a downpayment, setting up a separate, dedicated savings account can solve the problem. This method is perfect for busy professionals and those feeling overwhelmed by balancing expenses.
Automatically transfer a portion of your paycheck to this account.
Create a "no-touch" rule for anything outside of emergencies.
Earn interest over time with high-yield savings accounts.
Real-Life Example:
A young couple, both working full-time, set up an automatic transfer of $200 each month into a high-yield savings account. Over the course of two years, they saved enough for their first home, using the separation of funds to stay disciplined.
2. Take Advantage of Hawaii-Specific Assistance Programs
If you’re struggling to save and think homeownership is out of reach, you could be missing out on state-level programs designed to assist with down payments. This tip is for anyone unfamiliar with the benefits that can come with local housing initiatives.
Programs like the Hawaii Housing Finance & Development Corporation (HHFDC) offer assistance.
You may qualify for grants or lower-interest loans for first-time homebuyers.
These programs help reduce the financial burden on your initial downpayment.
Real-Life Example:
A first-time homebuyer in Kailua applied for an HHFDC program and was able to get a $10,000 grant, which covered part of her downpayment. Without this, she would’ve had to wait at least two more years to save enough.
3. Cut Down on High Rent Expenses
Are you paying sky-high rent in Oahu? By moving to a lower-rent area temporarily, you can save faster for your future home. This strategy is ideal for renters frustrated by their inability to save while paying steep rent.
Consider moving to a more affordable neighborhood for 6-12 months.
Use the rent savings to boost your down payment account quickly.
Lowering your rent by $500/month can mean $6,000 extra savings in a year.
Real-Life Example:
A software engineer living in a luxury Waikiki apartment moved to a modest studio in Kaneohe, cutting her rent by $600 a month. In just one year, she saved an additional $7,200 toward her dream condo near the beach.
4. Monetize Your Space: Airbnb or Room Rentals
If you own or rent a space with extra rooms, turning it into an Airbnb or renting it out can help accelerate your savings. This works for people who have space to share but feel burdened by high living costs.
Rent out a spare room or your entire home when traveling.
Leverage Hawaii’s tourism or university students looking for a 3-6 month lease.
Use income directly for your downpayment savings.
Disclosure:
Make sure to check with your house rules and/or your landlord on what the minimum leasing term is set to. Almost all rentals will need to be rented out at least 30 days at a time.
5. Make Use of Work-From-Home Flexibility
For those with demanding jobs, working remotely can save time and money. By cutting down on commuting costs, meals out, and office wardrobe expenses, professionals can find hidden savings opportunities.
Save on gas and vehicle maintenance
