Eight Ways to Power-Save Your Way To a Down Payment

1. Move in with your parents or in-laws

Explain that you’re thinking strategically in moving back home. The

quickest way to get into the housing market is to maximize savings,

which is difficult to do when you’re paying the cost of rent in a big

city. You’ll pay your parents a token amount of rent, but most of

your savings will go directly into your house down payment fund.

Tell your parents to think of the grandchildren you’ll be raising in the

house you’re saving for.

2. Move down one level of rental

If you have a two-bedroom apartment, try going down to one bed-

room. Or, trying squeezing into a bachelor apartment. You could

also look at moving to a cheaper part of town, as long as it won’t

jack up your commuting costs. Get rid of stuff that won’t fit in your

new, smaller place, or store it in your parents’ basement. Don’t

spend money on a storage unit.

3. Sell your car and take the bus

You’ll be saving on fixed costs such as parking, insurance, gas,

maintenance and possibly car payments, and you’ll be protected

against the risk of financially catastrophic four-figure repair bills.

Rent a car or use a car-sharing service for those times when the

bus won’t cut it. A cheap bike will help you save on bus fare.

4. Stop buying lunch

A pain, but worth it. You’ll have to think ahead by either picking

up the right groceries to make your own lunch, or by scooping up

after-dinner leftovers. Healthier than your food-court lunch, which

you’re probably sick of anyway.

5. Dial down your vacations

New York is out. Maybe Buffalo. For West Coasters, maybe Seattle

instead of Hawaii. Use the likes of Airbnb (airbnb.ca) to find cheap

accommodations instead of staying in a pricey hotel. Or stay home

and use some of the money you saved on hotels to try some nice

restaurants in your town. This is good practice for when you own a

home and find that fancy vacations are unaffordable without going

into debt.

6. Put a $100 price limit on birthday presents

Extravagant presents are fun to both give and receive. But they’re a

luxury for people who are more financially settled than someone who is

 

madly saving for a house down payment.

 

 

7. Cut your cable, TV and landline

Almost like heat and hydro, an Internet connection is essential.

But a home phone is dispensable if you have a smartphone, and

cable TV can be replaced by Netflix, watching shows online and

using an HDTV antenna. Also, try buying up DVDs of movies

and TV show seasons at garage sales, or find stores that sell

used DVDs, CDs and videogames.

 

8. Halve your spending at Restaurants and Bars

Studies of Generation Y spending habits show that going out to

eat and drink is big. Hey, everyone needs a hobby. But this one

is too expensive for people who are set on buying a house. Aim

to eat out less often, and rather than pay marked-up restaurant

or bar tabs, grab a beer from the fridge.

And one more thought: Ask for a raise at work!