by Kent Braaten
on Tuesday, June 2nd, 2020 at 12:00pm.
With the average home in Saskatoon being around $350,000, saving for a down payment can seem like quite the mountain to climb! With a minimum of 5% required, that means you’ll need an average of at least $17,500 to get started—you could buy a brand new car for that! So, where do you begin?
If you’re thinking about buying a home, here are some simple strategies to help you save up for your down payment quicker:
Use Your Auto-Savings
If you’ve never used an auto-savings program before, saving for a down payment is the perfect time to start! Depending on your bank, there may be a couple different options for auto-saving, including:
Automatic Scheduled Transfers - These are scheduled fund transfers that you can put into place to automatically take a set amount from your chequing account and place it into your savings account. These can be scheduled on many frequencies, but a popular option is bi-weekly on payday!
Top-Up Savings - These types of savings happen each time you make a purchase, allowing you to round up your total “spend” to the nearest dollar or five dollars, and depositing the difference into your savings account. So, if you went to Tim’s and scored your morning double double for $2.17, it would be rounded up to $5.00, and the difference of $2.83 would go into your savings!
These auto-savings options allow you to easily move money into your savings without having to make the conscious effort, so you won’t even notice having done it!
Cut Unnecessary Extras
Whether it’s a subscription box you never remember to cancel or a membership you’re just not using anymore, all the little recurring fees can really add up. So, when it comes time to start saving for your down payment, take a serious look at where your money is going, and narrow down spending to what you actually need. By doing so, you would be surprised at what you could actually be saving!
That useless gym membership you stopped using because you just prefer to run around your block? Cutting it could save you $120-960 per year, depending on the gym!
That cable box that is neglected for all your many streaming services? Cutting it could save you $1,200 per year!
Eating out for lunch every day at work? Bringing a lunch from home could save you $3,900 per year!
Buying a new book every month (or every other week)? Getting a library card could save you $300-600 per year!
Stopping at Starbucks every morning for your caffeine fix? Making your own cup of joe at home could save you $1,040 per year or more!
Declutter & Re-Home
In the age of Facebook Marketplace, rehoming your unused furniture, housewares, and electronics is easier than ever; and a great way to line your wallet when you need to save. All you need to do is snap a picture, name a price, and find a happy customer to give a new life to the things in your home that no longer belong. Plus, as an added benefit, it will also mean one less thing you need to move when you do buy a home!
Turn a Hobby Into a Side Hustle
If you love repurposing old furniture or knitting pairs of socks, why not sell them to bring a little extra cash into your home? If you are great at math or science, tutoring could be an easy way to lend a hand to your neighbours while adding to your savings. If you love dogs and exercise, consider joining a dog-walking community, such as Rover!
No matter what you are passionate about, think of how you could use what you love to help supplement your savings without feeling like you are just creating more “work”.
Borrow From Your RRSP
Here in Canada, the Home Buyer’s Plan allows you to withdraw up to $35,000 from your registered retirement savings plan (RRSP) if you are using it to buy a home! So, if you are buying your first home and have retirement savings poked away, you can borrow it to help with the down payment without reaching retirement.
Saving for a down payment takes time, but with these simple savings solutions, you’ll be able to reach your goal faster than you even thought possible. And when you finally have what you need and it’s time to start your home search, I’ll be here to help. Happy saving!