Tips On Saving For Your Downpayment
Saving for a new house can be hard, especially in Alberta where the housing market is strong and home/lot prices continue to rise. But, there are many ways for first (and second) time home buyers to save money for their down payment.
Here are just a few tips from your team at Excel Homes:
- Review your current budget – Are you already spending more than you can afford? One way to establish a savings discipline is to “save” an amount equal to whatever is spent on non-essential indulgences. Put a matching amount in a cookie jar for expenditures for beer, wine, cigarettes, manicures, blow-dries, coffee, etc. If you can’t afford to save the matching amount, you can’t afford the $4 venti almond low-fat latte from Starbucks.
- Set regular saving goals Figure out how much you’ll have to save per week, per month, or per paycheck to achieve each of your savings goals. Regular objectives ensure you stay on track and accountable to your spending.
- Consider relocatingDepending how serious you are about saving money, if you’re renting consider moving to a cheaper rental home and save the difference – While this sounds inconvenient, remember short term sacrifices reap long term rewards.
- Cut the Credit Card and the temptation Reduce spending with your credit card – only purchase what you can afford. If you have credit card debt, pay it off or consolidate them to reduce your debt and also the interest that you’re paying.
- Bring your own lunch to work The $1 you spend every day on lunch could mean an extra $26 in annual savings. (A 4-year-old, who starts bringing her lunch to work just four days a week until the age of 65, at a 6% rate of return, could have an extra $11, in savings.)
- Save your loose change At the end of every day, collect your loose change. Each month, bank it! Every bit counts. Another idea is to save all your $5 notes. Each time you see a $5 note in your wallet, don’t spend it and put it into your loose change jar at the end of the day.
- Change your shopping habitsShop for food with a list and stick to it. People who do food shopping with a list, and buy little else, spend much less money than those who decide what to buy when they get to the food market. The annual savings could easily be hundreds of dollars.
- Be ATM specific Only use your bank or credit unions’ ATM machine. Using the ATM of another financial institution once a week could well cost you $3 a withdrawal or more than $15 over the course of a year.
Most importantly, don’t give up! Remember, good things take time. There will undeniably be times when you feel discouraged, however it’s truly possible to save if you set up a strict savings plan and stick to it! You’ll be glad you did.