When you’re thinking about
buying your own home, it can mean sacrificing some things for a while in order
to reach your goals. Saving for a down payment can take time, especially in a more expensive city such as Toronto, but there are
some time-tested tips for saving faster.
They won’t all be easy, but in the long run you can look back and realize it was worth it to get your new house or condo!
Here are 10 Ways to Save For A Home:
1. Live with parents
It’s an idea you might hear suggested a lot, but if you can do it, it really is a great way to save money faster. Your parents want you to get your own place (just as much, or more, than you do!) so they will charge you low rent so you can save up. Living with parents for even a year could mean saving a significant amount of money toward a down payment. If your parents make you a little crazy it will also help you appreciate your new home that much more when you get it. (Just kidding, thank you parents)!
2. Live with roommates
If living with parents isn’t an option, you could live with roommates to help share the costs of rent. Then, you’ll have more money to put aside in savings. If you have more than one roommate you can save even more. (Plus, your life could resemble some of your favourite sitcoms).
Close enough to work? Ditch four wheels for two.
3. Ditch the Car
Car payments are very expensive on a monthly basis, so getting rid of those costs will make a big difference. If you’re a two-car household, sell one of your cars and figure out a car sharing plan while you save. Or, cut out car/maintenance/gas costs altogether and take the subway or bus. If you’re close enough you can even ride your bike to work.
4. Cancel the Cable
Bills for cable television are a lot per month, especially when you can watch television online. If you have to have some entertainment, the small cost of a Netflix account is preferable to the cost of those 999 channels you probably don’t watch many of anyway. Cable providers now also offer “skinny” packages with basic channels for less.
5. Cut out little things
This is one of the harder parts of saving money, but one of the most effective. Everyone has little things they indulge in that really add up over time. Start by adding up what they cost, so you can really see what you’ll be saving.
For example, if you dine out every weekend (let’s say that’s $100 every Friday night, and that might be on the low end, that’s $400 in savings every month. Over the course of a year that’s $4,800+ in savings).
Other little things you can add up if they apply to you: 1-2 cups of coffee a day, how often you buy lunch/dinner, order take out, see a movie in theatre, or buy alcohol. Once you do the math you will be surprised how much you spend on these little things over the course of a year. Consider packing a lunch, brewing to-go coffee at home, and buying less alcohol (or not buying overpriced drinks when you’re out). Be honest with yourself about where you can cut back without denying yourself everything!
6. No Online Window Shopping
Scrolling through the latest clothing, electronics, and other fun stuff online can lead to impulse buys. Remember, while you might love those sunglasses (that you didn’t know existed yesterday), you’ll love the home you’ve been dreaming about (for a long time) much more! Don’t online shop for fun. Want to avoid temptation further? Click unsubscribe on all stores/businesses whose “50% off sale!” “This just in” and “Don’t miss this deal!” emails you subscribed to. If you don’t know the sales exist, you won’t feel tempted to pull out your credit card.
Miss the Live Show
Many people spend hundreds per ticket for multiple concerts or sporting events in a year. If you love concerts or can’t miss seeing your home team play for a whole season, consider just picking one event during the time you’re saving. Also, will tickets in the 10th row really be worth another $200 more than the 30th? The music and the energy of the event are the same no matter where you sit. Again, do the math of what concerts or special event tickets cost you in a year.
Affordable trips closer to home can be just as fun!
Stay Grounded
Love to travel? Of course
you do, it’s amazing! However, it is also a huge expense when you factor in
airfare, hotels, meals, and more. If you have loved ones far away that you
can’t go a year without seeing, think about video chatting with them more often
or only taking one (low budgeted!) trip that year. If possible drive to see
them. Otherwise, traveling for fun is an expensive indulgence that you should
think about postponing while you save for a home. Arrange more affordable mini vacations, like a weekend at a friend's cabin, a road trip to the beach, or renting a campsite for a few days.
Charge Rent
If you already own a home but are saving for a new one, consider renting out your basement apartment or extra space. The monthly income will help you pay your current bills while also being able to put some savings away in preparation for buying a new house or condo.
Pay off Debts
After saving for a while, free yourself of any current debt. It won’t be painless, but you’ll feel better being financially stable enough to afford a home once debts are out of the way. Then, you can more easily afford ongoing payments on a house not just a down payment. Before taking on a mortgage, you want to make sure your income will be able to support your new home, without old debts making it too much of a struggle.
Some of these tips are good to keep up indefinitely while others, like treating yourself to dinners out, will just be held off temporarily. Once you save money for your new home, the sacrifices you made to get it will have paid off!
What money saving tips work well for you? What did you cut back on while saving for a home?
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