My husband and I are in the midst of attempting to save $40,000 over the next ten months, as we prepare to move back to my hometown and buy a house there. We are committed to putting down at least 20% on our next mortgage; we are also committed to buying a “forever” house, which is going to cost a mint back where I grew up. That $40,000 – on top of what we’ve already saved over the past six months or so – will go to our down payment and closing costs.

Saving money only gets marginally easier when you have a big, long-term goal at the end of the rainbow. Because we likely won’t make our purchase until the tail end of 2013, it means we’ll be funneling all of the extra money from our monthly budget over to our housing fund. That leaves our previously-budgeted “fun money” as our only source of discretionary income for the rest of the year.

The temptations are everywhere, though, and they are relentless. They come in the form of my husband, asking if he could take me away to a night at an upscale hotel – with dinner on the town – to celebrate my birthday next month; they come in the form of my daughter, who wants to attend a pricy ballet camp this summer; they even come from my own wants, like the new wardrobe I’m desperate to have to replace clothing I’ve been wearing since I was in high school.

I’ve been working on a strategy to compete with these urges and temptations at spending money when I really should be saving money. It all boils down to asking myself this question:

“How much house could I buy with that?”

Let me show you what I mean…

My Daughter’s Summer Camp

My daughter’s only four years old, but already she has visions of grandeur. One of her friends at school has been talking about a ballet summer camp she attended last year. The camp is located in the next town over, and wouldn’t require her to spend the night or anything. But the 5-day program comes at a premium: $200.

While I’d love to say yes to my daughter – and, in a different time, I would – I paused and instead asked myself, “How much house could I buy with that $200?”

By adding $200 to our down payment fund, it would be like adding $1,000 to the purchase price (I’m using the 20% down payment equation, here).

My New Wardrobe

I am very blessed to be the same weight – and roughly the same proportions – that I was in high school. On one hand, this is great, because I can still wear my high school wardrobe; on the other hand, this is bad, because I am still wearing my high school wardrobe. So instead of dressing like a grown up, a lot of my clothes are holdovers from the 1990s. The result is that I wear a lot of flannel shirts and short sundresses that are not age-appropriate. I’d love to be able to ditch my old duds and start from scratch, but I’ve priced it out: I’d likely spend about $500 just to upgrade what I currently have.

How much house could I buy if I put that $500 into my down payment fund? Adding $500 to my down payment would be like adding $2,500 to the purchase price.

The Weekend Getaway

Last year, my husband and I took a weekend getaway as a combination birthday/anniversary present. We pooled our resources, and spent about $800 for a few nights away in a ritzy hotel, along with nice meals while we were gone. It was over the top, but any couple with kids can tell you that spending some time on your own is necessary now and then to maintain you sanity.

We’d like to do it again this year, but I can’t overlook the fact that adding that $800 to our down payment fund instead would increase our buying power by $4,000.

In all, I could spend about $1,500 on my daughter’s ballet camp, my new clothes, and a weekend away with my husband, or I could boost my purchase power for our next home by $7,500 by saving the money instead. At this point in time, saving the money seems like a no-brainer.

What tactics do you use to keep yourself from spending money and saving it instead?

Libby Balke

Libby Balke