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5 Small Tips to Save for That Down Payment

Blog by Claire LeLacheur | August 30th, 2010

You have decided that home ownership might just be your thing. You have made the mental jump and you can handle monthly mortgage payments, the occasional leaking hot water tank repair, and just maybe you could be a handy man.

But the first big hurdle stands right in your way. The dreaded down payment! In Vancouver real estate the down payment can be a bit bigger then most other Canadians must deal with, and in some cases the down payment can often be the same as the price of a house and some land and outbuildings in Saskatchewan; however there are some ways to trick yourself into saving money. When it comes to a down payment every little bit counts!

1. Go auto pilot – Make your savings a no-brainer by setting up an automatic transfer to your savings account on payday, so you're not tempted to spend the money elsewhere. Even if it is $20 per check every two weeks that translate into $480 at the end of the year you didn’t know you had.

2. Keep the change – remember that big jar of change that you had in university? Every time you come in the door you empty your pockets into that jar. Bring it back into fashion. Get your spouse and kids involved. It can easily end up being a couple hundred dollars a year.

 3. Forget the raise – you just got your raise and now you have extra money every paycheck to go out and spend on more things. Forget it. Keep your standard of living on what you make now and take the extra money that you make from your raise every month and transfer it into your savings account directly. This could lead to some big time savings down the road.

 4. Keep your habits – it took you years but you finally paid off those student loans. But wait. Don’t stop with the payments. The only difference is that the payments go to your savings account instead of paying off the loans.

 5. Finder’s keepers – we all run into occasional money. The check we forgot to cash from the birthday card, $20 in the pocket of last years winter coat, and your friend finally paying you the $40 you won in the bet on the hockey game last year. Take that money and stick it right in your change jar. You didn’t need it up until now, you won’t miss it.

The bottom line is that it is hard to save, because saving does not give you instant gratification, and we North Americans love our stuff. But the more you save the better the neighborhood and the house will be when you finally put it all together for that big down payment.

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