Money·4 min read

How I Became a First-Generation Homebuyer

February 13, 2020

The Story

For most of us, living alone is the dream. But it's an expensive dream.

How do I make it real?

Ask Rachel F. She went from paying $950 a month living in an apartment with roommates to buying a $275,000 fully-renovated 3-bed, 2-bath home that she has all to herself. (Okay, herself and her dog.) 

Seems like a big upgrade. 

It is…and it didn’t happen without some big changes. Like living in her friend’s basement for about 8 months. And tracking her spending like she never had before. Oh, and changing jobs.

Say more about all of that. 

Rachel wasn’t happy with her career, and didn’t see a lot of opps for growth. So she signed up for a bootcamp to learn a new skill. The $11,500 price tag set her back a little bit at first, but meant she might earn a much higher salary when she finished. Spoiler alert: it worked. Now, Rachel makes $95,000 a year as a UX designer. 

The bootcamp also introduced her to a designer with a studio apartment where she could live on the cheap while she saved for a house. $450-a-month cheap. Earning a shiny new salary and cutting her rent in half meant she could save a LOT more than before. 

But I like my job. And none of my friends have an extra apartment on their hands.  

Rachel also got strict with her spending, keeping her big goal in mind. She didn't go out for dinner and drinks or take any trips. She went to the salon less. And she meal prepped her work lunches.

If housing, food, travel, and self-care aren’t areas you’re willing to cut back, look for other ones. Like only shopping secondhand, picking a single streaming service to binge or biking to work. It all adds up. After less than a year of serious saving, Rachel had about $19,000. 

Related: theSkimm on Budgeting

Wow. And that's what she spent on a new house?

Not exactly. Thanks to a first-time homebuyer credit, Rachel's high credit score meant she didn't have to put all that down. In most cases, you want to make the biggest down payment you can. Not only will you owe less, but you could also qualify for a better interest rate. Meaning you'd also pay your lender less over time.

But there's some trade-off between writing a big check now to save later and writing a medium check now to keep some money ready if you need it. Rachel chose to put 3% down, so she'd have cash while she gets used to the whole homeowner thing.  

So she’ll be paying off the house for a long time, right?

30 years – unless she refinances. For now, she makes a $1,600 payment every month. That includes private mortgage insurance (PMI) and property taxes. If you're knee-deep in the buying process, take a look at your other financial goals before making the call about loan terms and length. Aaand look for any places to save during the process.

Related: Mortgage and Homebuying Terms to Know

Like where?

Closing costs. Those are the fees, insurance, and taxes you have to pay to seal the deal. They usually add up to about 2-5% of the home's price. Even though buyers typically pay most of them, you could negotiate with the seller. It worked for Rachel.


There’s no one right way to buy a house. And you may have to get serious about tracking and trimming expenses first. But it is possible...even when you’re flying solo. Watching Rachel’s story can help you figure out if it’s right for you. 

Asking for a Friend videos highlight one woman's story. They do not necessarily reflect theSkimm's point of view.

Do you know someone with an interesting finance story? Want to share your own? Submit nominees for Asking for a Friend here.

Subscribe to Skimm Money

Your source for the biggest financial headlines and trends, and how they affect your wallet.