6 Tips To Save for A Down Payment
Where are first-time buyers getting money for a down payment? If you aren’t one of the lucky ones to get help from the parents, heroic savings measures are needed by anyone thinking of buying in expensive cities such as Vancouver and Toronto. In other words, you must make sacrifices on all your spending.
Here are six ideas that can help you save thousands of dollars.
1. Opportunities to Save In Your Budget
Go through your budget and look for opportunities to save. When looking at your fixed expenses, make sure to ask yourself if you’ve done everything possible to reduce your costs. Here are a number of examples of how to lower your fixed expenses:
No pets – buying food is expensive and so are vet bills
Eliminate your cable subscription
Switch to a cheaper cell phone plan
Ask your car and home insurance company for a better rate
Relocate to lower your rent or move in with your parents
Sell your car and take the TTC/bus
Stop buying lunch and pack it instead
Stop the Starbucks run everyday
Do a staycation versus a vacation
Cut out dining in restaurants and bars
2. Make More Money By Getting A Part Time Gig
Once you have trimmed your budget, it’s time to increase your income. The easiest way to start making more money is to ask for a raise in your full-time job or ask for more shifts. If you’ve already exhausted these options, it’s time to consider picking up a second part time job. Here are some examples of side jobs:
3. Adopt Money-Saving Hobbies
Hobbies are a great way to save money as they can keep you from shopping, going out for dinner, or other more expensive hobbies. Try incorporating a pastime or learning a skill like the ones listed below:
Car maintenance and detailing
Arts and crafts
Not only can many hobbies save you from spending money, but building a new skill or building upon your current skills can help with personal and career development. And maybe you can even make a buck by selling your craft.
5. Involve Friends and family
Don’t ever underestimate the generosity of family members. Becoming a homeowner is something your family will understand, and most are happy to contribute to your cause. If you are getting married, instead of a gift registry, let all your guests know you are saving for a home and get them to gift you cash instead.
6. Set Manageable Goals
Saving money for a down payment on a home is a very big task. Often it can take years, and keeping up your enthusiasm will be challenging. One way to make the process easier for you is to try breaking your saving goals down into manageable sized blocks. When you hit your goal, treat yourself to a free reward like a hot bath or a new library book.
If you set goals and stick to them, before you know it you’ll have a down payment saved. Then all you’ll need is a mortgage pre-approval from a mortgage broker and you’ll be ready to start house hunting!