How ‘Revenge Saving’ Is the Best Strategy To Becoming a Homeowner in the Next Year
Photo-illustration by Realtor.com; Source: Getty Images (2)
According to a recent article from Realtor.com, the post-pandemic trend of "revenge spending" is being replaced by a more disciplined approach: "revenge saving." Faced with high inflation, soaring home prices, and student debt, Gen Z and millennials are adopting aggressive savings tactics, like "no-buy" challenges, to build up funds for major life goals. This shift is a direct response to a tough financial reality where saving for a down payment is often seen as the hardest part of the homebuying process.
The financial pressure on younger generations is immense. Beyond the down payment, they face a mountain of other expenses that are often underestimated, including closing costs (2-5% of the home price), PMI for smaller down payments, moving expenses, and the ongoing costs of maintenance and utilities. A recent survey highlighted that a staggering 90% of Gen Z homeowners felt they had underestimated the true cost of owning a home. This makes the "revenge saving" mindset not just a trend, but a necessary strategy to build the financial buffer required to own a home successfully without falling into debt.
Experts cited in the article recommend several practical ways to make "revenge saving" work. A key tactic is to automate savings transfers each month to enforce accountability. Other simple but effective methods include canceling unused subscriptions (which costs Gen Z an average of $276 per year) and cutting down on discretionary spending like dining out. For storing these savings, financial experts advise prioritizing low-risk, liquid options like High-Yield Savings Accounts or CDs, while generally avoiding volatile stocks or retirement accounts for short-term goals like a one-year home buying timeline. Ultimately, the strategy empowers aspiring homeowners to take control and build the necessary capital to not just buy a house, but to be financially prepared for the realities of owning it.
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Fintech Founder at My Home Pathway. VC Backed Startup. Financial Inclusion Leader and Speaker.
Risk and project management professional with experience in Federal Reserve banking regulations, risk management policies as well as risk management advisory services. Critical skills include credit risk analysis, capital markets, strategic planning, current state assessments and target operating models. Ability to assess evolving regulatory guidelines and potential impact on financial services organizations operationally and strategically.
Mr. Johnson received his Bachelor of Science in Management and International Business from Penn State University where he was a Bunton Waller Scholar and Division 1 athlete and his MBA in Finance and Accounting from New York University.
