The internet is bursting with financial tips, tricks, and trends. TikTok, specifically, has tons of financial advice, with users sharing their success stories and posting about their favorite budgeting methods.
If you’ve been wanting to buy a house, you might see these money tactics and wonder if they could help you finally save up for that down payment.
Read on to learn about the most popular TikTok budgeting methods and trends—and what the experts say about which of these could help you become a homeowner.
The Financial Independence, Retire Early (FIRE) method
The FIRE method is all about extreme savings and investment, with the goal of retiring early. The general idea has been around long before social media (FIRE concepts can be traced back to the 1992 book, “Your Money or Your Life”), but TikTok has really set FIRE, well, on fire.
One FIRE method-follower on TikTok explains that she’s hoping to retire in her 30s—she’s currently 27.
“The thing that people don’t understand is, like, retirement is not an age,” she says. “It’s an amount of money that you can have invested where each year when you take out a little bit of money to live on, the money that you have will still continue to grow and make up that difference.”
So, the idea is: save diligently and invest now, so your money can make money—and eventually, you can stop working and live off of your investment portfolio.
While it’s clear that the goal of the FIRE method is to retire early (it’s in the name, after all), hopeful buyers might see how the method could translate to buying a house: Save diligently, invest so that money can make money—and eventually, you’ll have enough for a down payment.
It’s more of a long-term savings plan, which might not be too helpful if you’re hoping to buy a home in the next couple of years. Still, the FIRE method, and the TikTok-ers who praise it, provide many lessons in investing and cutting down on daily costs that can certainly come in handy for anyone.
Financial Peace/Dave Ramsey’s Seven Baby Steps
The Financial Peace method, aka the Seven Baby Steps, comes from radio host and personal finance expert Dave Ramsey.
The method preaches seven steps to financial success, which Ramsey teaches in his online class, Financial Peace University, and his book “Total Money Makeover.” However, the basic principles of his method are easily found on TikTok.
According to Ramsey’s website, the seven steps are:
- Save $1,000 for your starter emergency fund.
- Pay off all debt (except the house) using the debt snowball.
- Save three to six months of expenses in a fully funded emergency fund.
- Invest 15% of your household income in retirement.
- Save for your children’s college fund.
- Pay off your home early.
- Build wealth and give.
These steps can give people a specific plan that makes saving seem less daunting.
“We need a path to run on because the way you eat an elephant is overwhelming,” Ramsey explains in one episode of his show.
However, some have critiqued the method on TikTok, saying the seven steps don’t fit their lifestyle. One woman who advertises she’s teaching a budgeting course shares her seven steps based on an average nursing salary. Another woman shares her “Dave Ramsey-ish” money method, using some of the strategy’s advice and ignoring other points.
But all in all, is this a good method for buying a house? It could be, or perhaps it could inspire you to make your own list of steps. When it comes down to it, this method is all about making and sticking to a financial plan, which can be very valuable.
Cash stuffing
Cash stuffing is another budgeting system that has become popular on TikTok. This method involves sorting cash into envelopes or a bill binder, labeled and organized by how you plan to spend it.
For example, if you want to budget $150 for groceries this week, you’d put that much into your “groceries” envelope. When you’ve spent that much at the store, you’re done. If you want to spend just $50 on takeout this week, you put that amount into your “takeout” envelope—and so on.
This can be helpful because it requires you to create a weekly (or monthly) budget, making it inconvenient to overspend.
There’s also a bit of psychology at play here. Studies show that more people are more inclined to make impulse purchases when using a card rather than cash. And it makes sense: tapping, swiping, or inserting a card is easy, but when you’re counting dollars and seeing a stack of cash dwindle, it can seem different.
As for buying a home, the amount someone saves by cash stuffing can go right into a down payment fund, which may accumulate nicely on every avoided impulse purchase.
However, cash stuffing could be risky. If your credit card is stolen, you can have it turned off and dispute charges with your bank. Not so with cash. Cash stuffers also sacrifice shopping online (where making price comparisons is easy) and miss out on rewards programs available with most credit cards.
100-envelope challenge
If cash stuffing didn’t work for you—and you’ve got a bunch of leftover envelopes—you might consider trying the 100-envelope challenge (another budgeting trend blowing up on TikTok).
This involves numbering envelopes from one to 100 and, each day, filling an envelope with the amount of money printed on the outside. So, on day one, you would put $1 in the first envelope. On day two, you’d put $2 in the second envelope, and so on. In the end, you’d have $5,050.
Some variations exist, like starting with the $100 day and working backward or doubling the funds (putting $2 in the first envelope, $4 in the second envelope, and so on).
No matter how you do it, this trend could be a great way to start setting aside some money for a down payment. However, for many, this challenge is easier said than done. After all, gathering up $5,050 in cash isn’t as easy as organizing some bills in envelopes. Some savers need additional budgeting tips to get them through the 100 days.
‘No-spend’ challenge
The “no-spend” challenge, which encourages people to buy only the bare essentials, has been around for a long time. After all, it’s the simplest form of saving. However, the official trend gained popularity on TikTok this year.
The idea is that if you skip life’s little luxuries—coffee, dinner out, a cute new pair of shoes, and so on—you’ll save enough money for something big, like a vacation or even a down payment. Some TikTokkers share their experience after doing the challenge for a month, and others set goals to not buy certain items for much longer.
Overall, the trend comes with good advice: Don’t buy what you don’t need. Even if you don’t plan to cut out unnecessary spending forever, this challenge can help you develop better, more mindful money habits.
As one woman explains in a TikTok video, “A no-spend month can help you boost your savings, gain awareness of your spending habits, and cut down on impulse purchases by making you think twice before buying something you don’t need.”
What do the experts say?
Tim Choate, founder and CEO of vacation rental company RedAwning.com, says every budgeting trend has pros and cons. But which trend to follow, if any, depends on a person’s current financial situation and goals.
He notes that FIRE is “attractive for aggressive savers who want to cut down on expenses.” Still, he notes that cash stuffing can be “surprisingly effective because it creates a tactile connection with saving, helping buyers remain disciplined with their funds.”
Choate reports he’s seen people succeed using some hybrid approach, for example, combining the Financial Peace method to gain longer-term stability and increase cash reserves, with elements of cash stuffing for short-term goals like home down payments.
“The key is to assess your financial personality and whether you thrive under strict regimens like FIRE or need more hands-on methods, such as sinking funds or envelope-based systems,” he explains.
Other experts stress the importance of taking a step back and determining the amount needed for a down payment. Perhaps you don’t need to save quite as much as you think.
“Just about every one of my borrowers thinks they need to have a much larger down payment than is required,” says Doug Perry, strategic financing advisor at Real Estate Bees. “In most cases, the minimum down payment is a small fraction of what the potential buyers thought was required.”
Denise Supplee, founder and operations savant at SparkRental, suggests inquiring about low down payment mortgages and notes first-time homebuyer grants may be available as well.
“Reducing down payment and mortgage costs can be even better than saving money over time,” she says.
