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Solid Strategies to Successfully Save for the Down Payment on a Home

There are certainly perks to being a renter. You don’t have mortgage payments, you don’t have to pay property taxes or mortgage and homeowners insurance, and, because it should be your landlord’s problem, your weekends are not taken up with pesky maintenance work or repairs. In theory it’s a pretty good deal.

And, for a while, especially when you are young and single, renting is cool. But it’s not stable and the fact is that all of that money you part with on the first of every month is getting you nothing more than a roof over your head for another 30 days or so. You are gaining no equity in a home and your landlord is free to sell up whenever they like. However, in many cases renters are not renting because they love the idea. It’s the lack of cash for a down payment that is holding them back.

In fact, a recent Bank of Montreal survey found that one quarter of Canadians under 40 live paycheque to paycheque , and have less than $1,000 in a savings account of any kind. And what’s more 35% of those people said that they saw no way to change that situation.

The good news is though, there are some less painful than you might imagine simple ways to start saving money for a home of your own. Here are just a few practical ideas.

Set Some Solid Savings Goals

Although your home shopping days may still be a ways away it’s important to figure out exactly how much house you can afford, based on your current income(s). Once you do that you’ll have a pretty good idea of just how much you need to save for a down payment, and research shows those who set specific savings goals do a better job at putting money away than those who don’t.

Take a Long Look at Your Current Habits

Spend an evening going through your bank and credit card statements from the last six months. Where is your money really going? Many people find that once they do this – and do it honestly – they have been ‘wasting’ more money than they imagined.

Open a High Yield Savings Account

Saving money in a standard savings account is a good first step, but to get really serious about saving for a down payment you need to make your money work harder. Open a higher yield savings account and stash the cash there instead.

Brainstorm Some Less Painful Ways to Save

Saving for a down-payment does not have to mean giving up everything you love. Here are a few expenses you may be able to cut without feeling too much pain:

Shrink your TV Package

The average cable TV bill in Canada is going up, not down. Cutting the cord  – that is ditching the cable company and streaming shows instead — can help you save money. And you don’t have to be glued to a computer. Set top boxes allow you to stream to a TV with ease and are relatively cheap and if you have a gaming console many of those can too.

Not willing to give up channels? Call you cable provider anyway, and try to negotiate a lower rate. If there’s another cable provider in your area, you’ve got leverage.

Drop the Gym Membership

It’s summer — get your exercise outdoors. Jogging, hiking, and climbing outside is free. And so is following one of the hundreds of at home exercise videos on YouTube once the colder weather returns. Or, if you want to be really on trend right now, download the Pokemon Go app to your phone. You’ll be surprised how far this addicting little game gets your walking in search of your prey!

Declutter for Cash

Most of us have too much stuff and a lot of it isn’t junk at all, it has just stopped being of use to us. If yours is a relatively busy neighborhood a yard sale may be an easy way to unload some of your your clutter for cash. Get the word out by promoting it on Craigslist – yard sale fans stalk those listings believe me – and posting signs in the neighborhood several days in advance.

If a local sale isn’t an option, or you have items to sell that are a little too good for a yard sale (especially tech gear and higher end clothing) then eBay, Etsy and Craigslist are all still great marketplaces to sell your stuff through.

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