Saving for a House

July 15, 2018 | Raya

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At the best of times, saving money isn't easy. But if you want to make a big purchase like a house, important lifestyle changes will need to be made. The Financial Consumer Agency of Canada provides tips on how to budget, as well as a link to a budget calculator to help you figure out where all your money is going. According to the website myMoneyCoach, there are many ways that you can save for a home. Here are a few easy ways that will take you one step closer to your dream:

  • Prioritize: If you eat out alot, take expensive vacations, buy the latest gadgets or drive new cars, it's time to tighten your belt and make different choices. If buying a house is your top priority then cutting back on big expenses is one of the fastest ways to increase your savings.
  • Pay off credit card debt: Paying a lot of interest on your debt will prevent you from saving money. Start paying down your debt and watch your savings grow.
  • Save more from work: If you get a raise, take that extra money and put it in a separate account.  Add in tax refunds and any other extra money that comes your way.
  • Get rid of one car: If your family has two cars you may be able to make do with only one vehicle.  Take transit, walk, bike or carpool. You would be saving on insurance, gas, and maintenance and this can add up to thousands of dollars in savings per year!
  • Look for cheaper ways to do things: Finding cheaper ways to do things can also help you save money. If you want to eat out look for coupons or better yet eat at home more and take your lunch to work. Borrow books and DVDs from your local library, use coupons to make purchases whenever you can, take less expensive vacations by sticking closer to home, and buy used clothes for the kids. 
  • Borrow from your RRSP: You can withdraw up to $25,000 from your RRSP to buy your first home. Just remember that you have to pay back the money within 15 years or it will be considered as income and you will have to pay tax on that money. Consult a financial advisor to make sure this is the right thing for you to do.
  • Use the Tax Free Savings Account: Talk to a financial planner or advisor to find out how you can take advantage of this great savings tool. 
  • Put a limit on presents: Birthdays and holidays can set you back on your quest for saving for a down payment. Keep it within reason and if possible place a $100 limit on gifts.
  • Cut cable TV and your landline: A landline can be dispensed with if you have a smartphone. And cable TV can be replaced with a cheaper alternative. 

These are just a few of the many ways that can help you get closer to purchasing your dream home or making any other big purchase. If you need more inspiration, take a look at these (free) books and ebooks:

Tax free saving accounts Smart Canadian's guide to saving money  Sucking eggs Clark Howard's living large in lean times

Living well Young money  Meet the Frugalwoods Frugalista files