There’s little more exhilarating than the prospect of home ownership. After all, owning property is a cornerstone of the American dream. But the idea of such a major purchase can feel a little pie-in-the-sky at times, especially if you’re a young adult who hasn’t accumulated all that much wealth yet.

Challenges like student debt, job insecurity, soaring home prices, the burden of rent, and tighter lending criteria complicate the first-time buying process and make it tricky to gather the capital for a down payment. But never fear: with enough patience, perseverance, and the right strategies, you can chip away at this goal and amass a fair lump sum sooner than you might think.

Check out our saving tips for those 40 years old and younger, and start building toward that dream today.

How Much Do You Need for a Down Payment?

The amount you’ll need to save to put down on a house depends on your target home price, your mortgage terms, the minimum requirements of your lender, and your own finances.

A down payment is expressed as a percentage of the home purchase price, and 20 percent has long been considered a good benchmark. That said, there are several lenders who’ll accept as low as 5 percent, so don’t panic if 20 is unattainable. Do keep in mind that if you’re putting down less than 20 percent, you’ll likely have to pay for private mortgage insurance, which will raise the overall costs.

7 Saving Tips for Under-40s Entering the Housing Market

1. Automate transfers into a separate account

It’s easier to save if you’re not thinking about it and your funds are located where you’re unlikely to touch them. So, open a dedicated down payment savings account and initiate automatic transfers just after payday from your checking account into this other account. This way, your balance will grow over time without much effort on your part.

2. Pick the right savings account

Choose the type of savings account you use based on your savings timeline. You ideally want to earn decent interest, but you also need to manage risk appropriately. If you’re hoping to buy a house within the next three years, opt for a more stable, lower-risk option like a money market account or certificate of deposit (CD). If you have time on your side (over five years), you can stomach a bit more risk for greater returns, so consider something like a balanced index fund with stock exposure.

3. Minimize the impact of debt

Student loan repayments are one of the most commonly cited hurdles to home ownership. If you have college debt that’s hampering your saving efforts, it could be worth exploring the option of refinancing your student loan to secure better terms – you might be able to lower your interest rate and monthly payments.

If you have multiple sources of debt, consider debt consolidation to combine them all into one reasonable monthly payment. It’s important to focus on paying off high-interest debt especially – you can save significantly in the long run if you’re not haemorrhaging cash to cover credit card bills.

4. Turn saving into a game

If you find that, in true millennial style, you respond well to challenges, reward systems, and small wins, why not use a money management app that gamifies the saving process?

5. Channel refunds and bonuses into your house fund

It can be tempting to use unexpected windfalls, like a bonus, inheritance, or tax refund, to treat yourself to the next shiny, new thing. Don’t do it. Rather, put that cash straight into your nest egg. Consider for a moment that tax refund averages sit close to $3,000 for individual returns, and if you take advantage of certain deductions and credits, you could get back even more, which would help hugely with your savings journey.

6. Make a move

High rental rates in city centers make it very difficult to scrape together spare change. If you’re one of the many young adults floundering under the burden of rent, think about moving to a smaller space or less expensive area to cut housing costs while you save. With many employers making work-from-home arrangements permanent, relocation outside of pricey urban centers might be an option now when it wasn’t previously.

7. Make lifestyle and behavioral changes

Successful saving often requires rethinking the way you currently operate on all fronts. Could you, for instance, embrace home workouts so you can eliminate gym membership costs? Throw out nice-to-have subscriptions? Pick up a side gig or freelance work to boost your income? Or temporarily contribute less to your retirement savings? The latter two tactics have been used by 36 and 12 percent of millennials respectively to save for a down payment, and if they’ve worked for others, they can work for you.