Saving enough money for a down payment can, at times, seem like an impossible task. However, all it takes is a little creativity, like these tips outline below and you will be on your way to home ownership faster than you thought!
- Automatic Transfers – Most banks offer this feature. Set up your chequing account to transfer any amount of money into a savings account on any set schedule. Try setting a certain amount to transfer every time you use your debit card. You won’t believe how fast a few dollars can add up! However, make sure you can’t access your savings account from your debit card, as it can make it too easy to spend.
- Set Aside Any Extra Cash – Received some cash in a birthday card or a refund from your taxes this year? Make sure to deposit it in your savings account right away. It may be tempting to spend/splurge when you receive extra, but just keep in mind how great owning your own home will be!
- Pack a Lunch – To buy a simple lunch, even at a fast food restaurant, can cost about $10.00. Doing this every day can add up to approximately $2600 per year! Packing your lunch every day, although less convenient can save you almost $2000 per year. The same idea goes for your morning coffee or dinner out.
- Hold Off On Four Legged Friends – It can be tempting to get a companion when you are living alone, especially when you are going out less to try and save for a down payment. However, although it may seem like food, toys etc. aren’t expensive in the long run, surprise vet bills are!
- Prioritize to Find a Less Expensive Alternative – Do you really need 800 channels for $100 a month? Try swapping your satellite dish or cable for Netflix. Instead of paying a monthly fee to run at the gym, try going for a hike or jog outside.
- Credit Card Debt – Pay off any high interest credits cards. Once you have paid it off in full, cancel the card. Talk to your bank about lower interest rate options to transfer balances.
- Be Realistic – Perhaps the most important tip is to keep your budget realistic. Saving for your first down payment will take time. Make sure your money saving goals are realistic for your income. Try breaking your long term goals down into smaller goals. Instead of saving by the year, do it by the month. At the end of the month when you have reached your savings goal, reward yourself!