How to Save for a Down Payment with an Irregular Income

man holding a folded dollar bill

Saving for a down payment is tough. After all, you’re likely going to need to bring thousands of dollars with you to the closing table. That goal is made even tougher when you have an irregular income. That said, it’s nowhere near impossible to achieve. Even those of us who have an income that ebbs and flows have the ability to become homeowners.

If you are self-employed, a freelancer, or otherwise have an up-and-down income, keep reading. Below are some of the best tips on how to save for a down payment with an irregular income. If you follow them, you’ll be ready to start house hunting before you know it.

Make room for your new savings goal in your budget

Whenever you have a new financial goal in mind, the first step is to make a plan for how to go about achieving it. Usually, part of that plan involves readjusting how you allocate your income and this time is no exception. If your goal is to save for a down payment, you need to make room for that saving in your budget.

If you have an irregular income, your budget will likely be based on the average amount that you bring home per month. While some months may be higher or lower than average, you should still be able to tell how much of your income typically goes toward covering essential expenses like your rent and student loans versus discretionary spending.

In this case, you’ll want to look at your how much of your discretionary spending — or the amount you spend on non-essentials — you can begin to put towards saving for your down payment instead. Once you have that number in mind, make it into your savings goal. In other words, aim to put that amount aside each month.

Be flexible with your goals

When you have an irregular income, it’s important to remember that goals aren’t set in stone. Some months, you may not have enough disposable income to fund your savings goal and that’s okay. Try not to beat yourself up if your income dictates that you can only put a small amount aside.

That said, if at all possible, do your best not to let an entire month pass by without putting anything aside for your down payment. Once you do that, it’s far to easy to get in the habit of not saving anything at all. Make a promise to yourself to put some amount of money aside every month, even if it’s smaller than you originally anticipated.

Put windfalls to good use

On the other end of the spectrum, don’t hesitate to put windfalls to good use either. If you have a particularly good month, push yourself to set aside more money than you normally would. Doing so will help you reach your goals faster and help create a buffer for months when your income is lower than normal.

The same can be said for any additional money that you earn that’s out of the ordinary. If, for example, you end up getting some money refunded from an over-payment on your taxes or you start a side hustle, you may want to consider adding those funds to your savings as well.

Try a savings app

It may not be the best idea to automate your savings entirely when you have an irregular income. (Overdraft fees, anyone?) However, if you’re not the best at putting money aside, you may want to think about using a savings app to help you make progress. In particular, apps that “round up” your spending to the nearest dollar and move the change into a savings account are a good bet.

With this method, you don’t really have to think about saving. It just happens. Since you’re only saving a few cents at a time, you may not see as much progress as someone who is purposely putting aside hundreds of dollars each month. But rest assured that your savings will start to add up over time. Ideally, without you even noticing a substantial change in your monthly spending.

Try not to spend it

Lastly, in order to succeed at saving for your down payment, you have to make an effort not to spend the money you’ve already put aside. Particularly in down months, it can be tempting to dip into your savings fund in order to soften the blow. However, the quickest way for you to grow your savings to the size required for a down payment is to leave it be.

If you need some help staying out of your savings, think about opening an account at a different bank. You’ll still be able to access the money, if needed. However, the transfer process will take a bit longer, which will make it easier for you to think twice before transferring the funds.

Ready to take the next step? Check out Beyond by Embrace, our loan product that’s made for self-employed individuals, freelancers, and small business owners. With Beyond, you can qualify for a loan by showing 12 months of bank statements instead of tax returns. Contact an Embrace loan officer today to learn more.

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Tara Mastroeni

Tara Mastroeni is a real estate and personal finance writer. She has a BFA in Media Production from Emerson College. Her work has been published on websites such as Forbes, Business Insider, and The Motley Fool. She has also been featured as a subject matter expert on Innovators with Jane King and the American Trends podcast. Find her at or on Twitter at @TaraMastroeni.