Fast-Track Budget To Save $50,000 For A Down Payment On A House

Once you figure out how much money you need to buy a house, it's time to get saving. This article shows how an average Hoosier can save $50,000 in two years by modifying the 50/30/20 budget. For those who are not familiar with this budget, 50% of your after-tax income goes to needs, 30% goes to wants and 20% goes to paying off debts and increasing your savings. We'll be assuming a $56,000 salary, which is the average for a person in Indiana, and a 15% tax bracket.

Base 50/30/20 Budget

	Percent of Budget	Annual Budget
Salary		$56,000
Take Home Pay	100%	$47,600
Needs - Housing	30%	$14,280
Needs - Cost Of Living	20%	$9,520
Wants/Luxuries	30%	$14,280
Debts	10%	$4,760
Savings	10%	$4,760

Fast-Track 40/20/40 Budget

	Percent of Budget	New Annual Budget
Salary		$56,000
Take Home Pay	100%	$47,600
Needs - Housing	25%	$11,900
Needs - Cost Of Living	15%	$7,140
Wants/Luxuries	20%	$9,520
Debts	10%	$4,760
Savings	30%	$14,280

Add Additional Income

	Additional Savings
3% Raise/Bonus	$1,680
Extra Income	$10,400
Total Additional Income	$12,080
Additional Take Home Pay	$10,268
New Savings Total	$14,280 + $10,268 = $24,548

As one can see, the fast-track budget requires some lifestyle adjustments and picking up additional income. Let's break it down into monthly figures to see how achievable this can be. It's easier to take smaller bites.

Monthly Budget Breakdown

	Annual Budget	Monthly Budget
Salary	$68,080	$5,673.33
Take Home Pay	$57,868	$4,822.33
Needs - Housing	$11,900	$991.67
Needs - Cost Of Living	$7,140	$595
Wants/Luxuries	$9,520	$793.33
Debts	$4,760	$396.67
Savings	$24,548	$2,045.67

Now that we have a clearer picture of the fast-track 40/20/40 budget broken down per month, the goal of saving $50,000 in two years or over $2,000 a month for 24 months looks more attainable. For ideas to cut costs and save more, read our money hacks article next.