If you ask most homeowners what the most challenging part was when entering into homeownership, chances are they would tell you it was coming up with the initial down payment! Aside from scouring the market to find the perfect home or even selecting the best Realtor for you – the down payment is by far one of the hardest aspects of buying a home. And with the combination of debt from credit cards and student loans, saving that initial sum can be enough to put you off the idea of homeownership before you’ve even begun to really consider it.
But before you get discouraged, there are some simple, savvy ways that you can realistically save for a down payment and achieve your dream of becoming a homeowner. Though it will require some sacrifices, it will all be worth it when you get the keys to your first home.
Ditch the Car
Living in the GTA, we’re fortunate to have a world-class transportation system. And whether you own one car or two, sometimes the goal of attaining your dream home can be worth the sacrifice of ditching those monthly car payments (not to mention insurance, gas, and repairs) and putting them towards your down payment instead. Taking public transit may seem like a big sacrifice, but once you’re finally able to put that down payment on your dream home, it will be well worth it. Whether you’re able to walk or bike to work, take public transit, carpool, or take advantage of ride-sharing services or hail Uber to run errands, you can make it work.
Stop Buying Your Lunch
If you’re the type of person who rushes to get out the door in the mornings with no time to make a lunch, then this can be one simple, savvy way for you to save some extra money. Sure, it may seem like petty change that won’t make the kind of impact that you need for savings. But just take a moment to tally on average how much those lunch expenditures are costing you over the course of a year. By spending a few minutes the night before to make a lunch or save some leftovers from dinner, you can save so much more than you realize. Plus, homemade lunches are often healthier and more filling.
Downgrade Your Living Expenses
Mull over your other everyday expenditures that are really unnecessary. Whether it’s your personal trainer that you use, or your weekly night out at the local pub with your friends – there are countless other ways that you can save quickly. Put off that vacation or cancel that cable subscription to really power up savings. A free app like Mint can help you track your expenses and see where money is being wasted.
Set up an Automatic Savings Account
Of course, when you finally end up committing to some of those everyday sacrifices, you need somewhere and some way to easily store all of those savings. That’s where an automatic savings account comes in. It can be difficult to avoid temptation when you have extra money lying around in your regular account. But by setting up a designated savings account that automatically transfers a set amount of money into it, you can skip that temptation factor altogether. And after each pay cheque, you can allocate a set amount to be transferred each month so that you won’t even notice it’s gone!
Saving for your down payment can seem like an impossible feat. But it’s not! By committing to your goal, you can easily find multiple ways to cut back on your expenses and place more of your income towards that down payment. All you have to do is be willing to make a few sacrifices!
In no time, you’ll reach your down payment target and you can start the home buying process. VERICO The Financial Forum Ltd. is on your side the whole way. We offer mortgage services to home buyers through the GTA region, including Toronto, Vaughan, Mississauga, Brampton, and Oakville. Contact us at 905-265-0246!