With these saving tips, you’ll get the down payment you need for your dream home
The down payment required for a home can seem like a lot of money, but you can save the required amount in just a few years by making a few smart savings choices. Depending on the type of property you buy and the type of loan you qualify for, you’ll need anywhere from 5% to 20% of the value of a property upfront in order to make a purchase. With the average price of homes in Ottawa being $400,000, that means most families will need tens of thousands of dollars to meet down payment requirements. If you follow some of the tips we’ve provided, you can reach that goal.
Balance Your Books
For most individuals and families, it’s very difficult save a significant amount of money without creating a detailed budget. Without knowing how much you can afford to spend on things like food and entertainment, overspending is very easy to do. Balancing your expenses can be done in a spreadsheet, budgeting software, or even on pen and paper. The key is getting accurate numbers from receipts, payroll stubs and other financial documents. If you need help creating a budget, don’t hesitate to get support from a professional or someone you know who is good with their money.
Downsize Your Lifestyle
A detailed view of your spending habits will give you a clear picture on areas that are best to make cutbacks. While small deductions in spending, like eating out less and reducing electricity usage, can contribute a little savings, cutting out big things like vacations and new car purchases can mean much bigger savings. No one likes to cut out the fun things in their life, but if you’re serious about new homes in Ottawa, doing so is necessary.
Avoid Excessive Restrictions
It’s often the small things in life that bring us the most pleasure. If you resort to eating poor quality food and never entertaining yourself in your effort to save for a home in Ottawa, you’ll likely burn yourself out and want to quit. If going out for the occasional nice meal or night out at the movies is what brings you pleasure, delaying your down payment goal by a few days or weeks is worth maintaining your happiness and sanity.
Protect Your Savings
Once you’ve created room in your budget for saving, it’s important to quarantine that money so that it’s difficult to spend. The easiest way to do this is to create a separate account, preferably one with a high interest rate. If your paycheck is automatically deposited, you can tell your company to deposit a proportion of your earnings directly into this account. Never touch this account unless in you’re in a dire emergency. Ideally, you won’t be able to access this money quickly.
As with any goal in life, the key to success is consistency. Stick to your plan, and you’ll have the down payment you need for used or new homes in Ottawa in just a few years. If you have your own tips on how to save money for a home, please feel free to share them with us.