Saving for a Down Payment

The hardest part of buying a new home is often saving up the down payment. Besides putting away that hefty amount of money, there are also many other things to budget for as well, like land transfer fees, potential renovations, buying new paint and furniture, and a lot more. Saving up that amount of money may seem impossible, but there are a lot of little ways to save money that can add up over time.

Here are some money saving tips that will help add up to a down payment for the home you want:

• Open a TFSA – A Tax Free Savings Account typically has a higher interest rate than a checking account, and you won’t be taxed on the interest that accumulates. Opening one and putting any money you don’t need to spend right away into it is a good way to start putting a little extra money away.
• Skip your daily coffee stop – Little expenses can add up without us realizing it. Spending $5 on a coffee on the way to work each day adds up to $1200 a year if you work full time. That’s a significant chunk of change you could be saving. Making your own coffee at home is a lot cheaper.
• Spend an evening at home each month – If you go out a lot, whether to a club, with friends for drinks, or to see a movie, consider choosing one evening you would usually go out and stay home instead. You can save the money you would normally spend, and you might be surprised how fast it adds up.
• Pay attention to power – People in Ontario pay a lot for electricity. Turning lights off, setting the thermostat a few degrees higher in summer (and lower in winter), and only running your laundry machine during non-peak hours are all ways to save a little on your power bill each month.
• Downgrade your phone – A lot of people in Canada spend huge amounts of money on their cell phone plan each month. If you can make do with a little less data or fewer minutes, you can save money by downgrading your plan. Saving $20 a month adds up to almost $250 a year, which is not a tiny amount of money.
• Dine in instead of out – Eating at restaurants is a good way to get a quick meal or try something new, and it’s also a good way to spend lots of money. Cutting down on your restaurant visits each month will be good for both your wallet and your waistline, and the extra money can all be added into your savings.
• Buy food in bulk – Buying bulk food is a good way to make your food budget go further, and will make sure you have more groceries in the house so you don’t feel as tempted to grab fast food on the way home.
• Cut down on unnecessaries – We all have things we buy too many of before we’ve used up what we have. Whether your particular addiction is novels, video games, clothes, DVDs, shows, or new CD’s, using what is already at home instead of buying new ones is a handy way to save money and storage space.

There are a lot of ways to save money out there, these are just a few. Hopefully by the end of this list you have already thought of some other ones. By making little sacrifices, putting money away in a savings account where it can accumulate interest, and being patient, you can reach that down payment goal that once seemed unattainable.