Before you start house hunting and dreaming about character or modern finishes, you need to save for your down payment. There are many ways you can accomplish this and not sacrifice your lifestyle. You just need to prioritize. Here are our top 6 tips to help you save for your down payment:
The best way to get started is to create a budget to identify how much money you are spending on entertainment, eating out, transportation, gym memberships, sports, clothing, makeup, and hair. Once you have your numbers, look for areas to cut back. Instead of ordering in, challenge yourself to cook your favourite meals at home. Do you need that gym membership right now? If we’ve learned anything from the past while is you can get a great workout in outdoors, if the weather permits, or use YouTube to get a fabulous home sweat in.
2. Pay off Debt
The title says it all – pay off your current debts. Once you have your debts out of the way, you will have a larger sum per month to put towards your down payment. Paying off your current debts can also be a benefit when you are ready to meet with a Financial Advisor. The more debt you have, the lower the mortgage amount will be. Talk to us about ways to consolidate debts and make this easier too!
3. Downsize / Reduce Monthly Costs
One of the fastest ways to save is to reduce your monthly costs. The first method of achieving this is…park that car! Walking or biking to work has its benefits. You will save money on gas and insurance, and feel great with all of that fresh air and exercise. If parking your car is too extreme, carpooling or riding the bus is another great option!
The second method of reducing your monthly costs is…sharing your living space! Getting a roommate can be a little nerve-wracking at first but the benefits are substantial. A roommate would be responsible for paying half of the rent and utilities; you could also carpool!
4. Create a Savings Plan
Once you have a budget, make sure you’re saving at least 10% or more off of your paycheques and watch those down payment savings grow. At Westoba, you can arrange for an automatic transfer right into your savings account, you can even set it up yourself through online banking. It’s that easy!
5. Borrow from your RRSP
Did you know that you can borrow up to $35,000 per year from your Registered Retirement Savings Plan (RRSP) without penalty? The only catch is you will be required to pay it back within 15 years. You can apply for the Home Buyer’s Plan (HBP) to buy or build your first home either at Westoba or any other financial institution.
6. Get a Financial Plan
Meeting with a Financial Advisor can get you on the right track to saving for your down payment because they fully understand your financial situation and your short and long-term goals. Working with you, they will create a plan personalized to you!