How This Guy Used an App to Save $35,000 for a Down Payment on a House

Hand holding a house key in front of a house.
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More than anything, Joshua Harding wanted to buy his own house.

Harding, 29, makes a good living from his career in medical sales, with some real estate on the side. He lives in Phoenix, Arizona. After years of renting, he felt it was time to buy his own house.

That meant he needed to save up some money for a down payment. But he couldn’t figure out the best way to do it.

These days, a down payment on a house averages about 6% of the house’s total value, according to the National Association of Realtors, although it can vary significantly from one homebuyer to the next.

It’s a myth that you need a down payment of 20%, although that was a rule of thumb for previous generations

To save up a down payment, Harding knew he needed a hands-on digital savings account — something simple and intuitive he could run from his phone. He knew that’d be the only kind of savings strategy that could work for him.

“Just something convenient,” he says. “Something where you can click into the app and you can see everything you want to see.”

Harding needed to save up about $35,000 for his down payment and had tried similar savings apps before, but he never really took a shine to them.

The Clink app seemed different, though.

“It just seems like they’re more transparent about exactly what they’re investing in, and how they’re investing,” he says.

How the Clink App Helped Harding Save for a Down Payment

Clink is a micro-investing app designed for beginning investors who want to start small. It enables you to invest in the stock market for as little as $1 a day.

Regardless of how much you choose to invest, your money gets deposited into Exchange-Traded Funds, also known as ETFs.

These investment funds are basically groups of several stocks, commodities or bonds that get traded together on the stock market. Since there are a bunch of them in each fund, there’s a lot less risk involved if the market slows down.

Once you link your bank account, the app automatically withdraws what you want to invest and puts it to work. You can also choose to invest larger amounts on a daily, weekly, bi-weekly or monthly basis.

Or, link your credit card, and have Clink invest a percentage of what you spend — so you can make sure you’re balancing your spending with savings.

While it’s an option, Harding wasn’t going to start with $1 per day. He already had some savings.

He dropped $2,000 of his savings into it, informing the Clink app that he preferred a “moderate” amount of risk when investing. (He could have chosen “aggressive” or “conservative” instead.)

Then he simply stopped paying attention to it. He figured he’d just see what happened.

“After a while, I noticed that it was growing pretty quickly,” he says. “I felt like it was a good way to save.”

Clink’s average return on clients’ investments was about 10% over the last year, about 7% over the last decade, according to the company.

Harding started dropping about $450 a week into Clink. He put his federal income tax return into Clink. Every month or so, he’d stick another $2,000 from his other savings accounts into Clink.

Between October 2016 and August 2017, he saved enough money in Clink to make the $35,000 down payment on a house.

Why the Clink App Was ‘A Major Part of the Process’

Harding says he was ready to be a homeowner.

“That was definitely a long-term goal,” he says. “I didn’t anticipate that Clink would be part of that process, but it ended up being a major part of the process.”

He says he’s been satisfied by Clink’s customer service, too, which is done via online chat.

“Whenever I have a question, somebody immediately has an answer for me,” he says.

That came in handy when it was time to close on his new house. At the last minute, a loan underwriter wanted additional paperwork regarding his investments and projections of their future growth.

“Clink was able to provide that,” Harding says. “They had solutions. That goes a long way.”

Since he just recently made his down payment on a house, his Clink account is looking pretty empty. But he’s starting to build it back up, sending $450 a week.

He says he doesn’t even keep a “traditional” savings account at a physical bank anymore.

“The return from Clink has been significant enough for me to say that I don’t need a savings account for this money,” he says.

The Clink app charges $1 a month, but it also offers a $5 signup bonus — which is like getting five months free. To get started, download the app here. Be sure to use the promo code: PH2016

For Harding, the biggest change to come from Clink is he now owns a home.

“Having my own house is a great feeling,” he says. “It’s a great feeling to know that you can get what you want.”

Mike Brassfield ([email protected]) is a senior writer at The Penny Hoarder. He needs to save more.