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How to save money for the down payment of a home

Posted Apr 1st 2022 in

There are many different ways that you can save for your home. These are some of our recommendations on the best ways to save for a house. While we say that you can use these pointers to save up for a house, you can certainly use the money for anything you want. Be that a car, a vacation, or to even pay down your debt. After achieving the first goal many people find that these same techniques help them reach other financial goals too. In this case, they keep on following these tips. 

Prioritize correctly

Saving up for something that really matters to you, such as a home, is about prioritizing correctly. Think about your habits. Do you often spend money on takeout or do you tend to take vacations many times a year? Or will you be able to tighten up on your spending to save for a home? It will be up to you and what you deem is more important. If saving a down payment for your home is important to you as a priority then try to look for areas that you can cut back on spending on so that you are able to put more money into your savings account. One great way to find areas to hold back on is through creating a budget. If you have not created one yet then this is a good time to start one. 

Always pay off your debts first

You won’t be able to save up a lot of money if you need to pay interest on your credit card debt or other types of debt. So, one of the first things that you should aim to do when trying to save money is to pay off all of your debt. You should begin by getting rid of the smallest debt you have that has the highest amount of interest. Then you will notice a snowball debt as you keep paying off your debts. If you try to apply for a mortgage but you have a lot of consumer debt then you most likely will not qualify for the loan. For many aspiring homeowners who want to own a home, they will need to pay off most of their credit card debt beforehand. 

Try only using one car

If you and your partner both have a car then consider selling one of them. Getting rid of one of your cars can end up saving you thousands of dollars each year. You can then move closer to work or where your partner has a job. You can both look at other options like walking or taking public transit, both of which are 80-100% cheaper than owning a car. You can even think about carpooling or riding your bike to work if the weather is nice enough. If this is something that you can do then you will be saving on your car payment, gas, maintenance, and insurance. On average the savings can add up to $9000 each year. Then, try to save the money that you saved here if you can.

Check out the homes that we have for sale in Oshawa and Clarington.