6 creative ways to start saving for the down payment on your first home

A recent study found that almost two-thirds of millennials expect to own their first home in Toronto. With the city’s average purchase price nearing half a million dollars, owning a home is no easy feat. Nonetheless, young aspiring first-time homebuyers still think it’s possible! Remember, there is no good or bad time to buy, it all depends on when you’re ready. Listed below are 6 tips to help you start saving for the down payment on your first home.

1) Carry cash

Many a financial expert will prescribe a cash diet to those who are looking to change their spending habits. Although cash can be cumbersome, the time that you spend rustling through your wallet can act as a deterrent for impulse purchases. Sometimes it only takes a few extra seconds to reconsider a potential purchase.  

Tapping and swiping your credit and debit cards is easy and convenient but amidst the ease, it is harder to keep track of your spending habits. When you opt for cash, there is a tangible cause and effect of your spending, so you see and feel your money supply dwindling. For many, this is enough to prompt wiser spending habits and erase frivolous financial conquests that will derail your money-saving efforts.  

2) Charge yourself to spend

Whether you know it or not, most banks offer accounts to promote saving. From tax-free to high-interest, there are plenty of ways that strategic banking can help you up your saving game. An effective and sometimes unknown option is creating an account that charges a fee each time you make a withdrawal, thus discouraging frequent spending.

3) Get smart

Even if you’re shelling out a king’s ransom on your bill every month, your smartphone can still be a helpful tool for saving money for your down payment. The app store is dense with financial apps that can monitor spending and encourage saving.

BillTracker is designed to help you stay on top of bills and stay away from interest fees. The simple interface organizes your bills based on their due dates and sends you an alert when one is looming. Without leaving your debts to accumulate, you can save on interest and stay organized.

For money management, Mint, formerly known as both Check and PageOnce, syncs your smartphone to your credit cards to record and categorize all of your purchases into a pie chart. The app analyzes the internet for offers tailored to your lifestyle that will save you the most based on your spending habits.

Similarly, TD Canada Trust’s MySpend app tracks your spending in real time and even sends you a push notification every time you make a purchase. MySpend compares your monthly spending to your average spending to help you get a stronger grip on your spending habits and save more efficiently. The app is exclusive to TD clients but hopefully all banks will soon follow suit.

4) Avoid ATMs

ATMs are convenient but convenience costs. It would be unrealistic to steer clear of ATMs but pesky fees can quickly pile up and thwart your plans to save. So a reasonable alternative would be making scheduled withdrawals where you make one large withdrawal to last you for the entire week, instead of blindly making withdrawals whenever you’re in need of cash. This way, you can avoid overdraft fees, set a budget, and ensure that your are using bank machines that are native to your bank.

5) Stop smoking cigarettes

It is no secret that cigarettes hurt more than just your wallet. In addition to the enormous toll that smoking takes on your health, it is also very costly. Smokers can spend on average around $1,300 on cigarettes every year and as a millennial hoping to buy your first home, that money can be used more wisely. Quit smoking, buy a home!

6) Make coffee at home

For many, giving up coffee is close to impossible. But by opting for an at-home coffee machine and buying coffee beans in bulk, you can cut the daily cost without having to go cold turkey. Coffee machines can range in price but the investment will surely pay off for daily consumers and save you money in the long run.

We hope that these tips help you start saving for the down payment on your first home!