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.