Need a down payment for a home?
Savvy ways to power-save your way to a down payment
If you’ve decided that it’s time to get into homeownership, you are going to need a down payment. Coming up with enough funds for a down payment can be overwhelming, especially if you are starting to save from scratch.
Don’t give up!
Saving for a down payment—or other big purchases—can be as simple as managing your money differently. These tips will help you power-save your way to a down payment…
Ways to successfully save money for a down payment
Get rid of debt
If you have credit card debt, pay it off! It’s impossible to save money if you are paying interest to someone else every month. Plus, if you apply for a mortgage with too much consumer debt, you won’t qualify.
Once you have your debt under control, think about spending with cash. Studies show that people who use credit spend about 15% more than people who pay for things with cash. That’s a solid chunk of savings to think about!
Change your transportation
If you are a two car family, it’s time to consider getting rid of one. Vehicles cost Canadians thousands of dollars a year in car payments, repairs, insurance, and fuel. If you have one vehicle, consider parking it or selling it altogether. Taking public transit, or riding a bicycle, to and from work will earn you significant savings.
Adjust your housing
Now is the time to be strategic and consider some housing options. Can you downsize from a two-bedroom apartment or condo to a one-bedroom? Can you move closer to work or live in a cheaper neighbourhood? Can you move in with family, or get yourself a roommate (or two)?
If the answer to any of these questions is yes, adjust your living arrangements. The monthly savings will be significant.
Cut back on spending
Saving for a home is all about having priorities. Now is the time to identify where you can cut back on spending and increase your savings. The best way to do this is by having a budget.
Take a look at your monthly spending, and where the money is going. Things like cable, having the latest phone, eating out regularly, buying new clothes, and always grabbing the tab when out with friends are places where you can easily trim down your spending.
Now is also the time to put expensive vacations on hold and lay low. Choosing a staycation or opting for only one vacation and banking the rest are two great ways to save. If you have the option of getting paid out for vacation time, skip the vacation altogether and put the money in the bank.
Put off the pets
Pets are wonderful additions to any family, but they can be costly. Vet bills will blow your mind and regular maintenance like food, bedding, and toys add up.
Protect your down payment, and wait to get a furry friend until after you’ve settled into your home.
When it comes to ways that you can save money, you really can’t go wrong. Making simple adjustments to your lifestyle and your spending habits can be as drastic as you want them to be. It will also depend on how badly you want a home.
When you start the ball saving, it’s worth looking into different types of savings accounts and incentives for first time homebuyers. You should also consult your financial institution, a mortgage broker, and (if you have one) a financial advisor to see which options will work best for you.
When it’s time to buy, I’m more than happy to help you find a home.
Call me directly at 250.792.2776