Saving money for a down payment on a home can be one of the most difficult things to do. It takes an immense amount of discipline and often includes making numerous sacrifices.
If you are already paying a mortgage on another home or paying rent, the process can be even harder. Thankfully, there are plenty of ways to save, some that you may find quite surprising, and others where you may need to make some lifestyle changes.
Whether you’re a first-time homebuyer or a long-term investor, these tips can help you to save for a down payment.
Automatic payments can be easily overlooked or forgotten about.
Sit down and go through all your recent credit card and bank statements to get an in-depth look at where your money is going.
Cancel monthly subscriptions that you do not use or need and change your monthly plans to more affordable options, if possible.
A few dollars of savings on each canceled account can add up quickly and you’ll be surprised with how much you can save each month.
Knowing how much you can borrow to purchase a home will help you determine how much you need for a down payment.
Seek a financial advisor, lender, or mortgage broker to review all your finances and assist you with the pre-approval process.
This process will also give you an idea of how much you can expect to pay each month when you do purchase a home, inclusive of mortgage payment, taxes, insurance, and any condo/homeowner fees.
Start a Down Payment Fund
Set up a TFSA or RRSP account with your bank where the funds will be saved and you can easily make monthly contributions.
Set a timeline to save your down payment and stick to it.
It may be very tempting to see the funds growing in your bank account and you feel the urge to treat yourself to something, but this will only set you back and extend your deadline.
Stay focused on your end goal and know that buying a home will be the ultimate gift to yourself.
With saving always comes the sacrifice of a few less luxuries.
Instead of going out for dinner every weekend, start cooking at home, this can save hundreds of dollars each month.
Pack a lunch to take to work and you can save about $15 per day. Make your own coffee and skip the daily trip to Starbuck and you can save upwards of $150 per month.
Be aware of the small luxuries that you’re spending money on and try to find ways to work around them. You don’t want to give up all the things you love in life, you simply need to find a new and affordable way to enjoy them!
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