By Jody Thompson
Most of you aged 20 -33 dream of one day owning your own home. It may seem unrealistic today, and not achievable without a real plan on how to get there. It is the small things that you can do that will get you into your first home more quickly. If you follow these five not-so-glamorous tips, I can guarantee you will own home far sooner than you ever could have imagined.
1. Have a Budget – When you land that first career job, it may feel like it is now time to splurge a bit after living the poor student for the last four years. It is good to treat yourself, however, it is also important that you have a budget and make a conscious decision on how to spend your money. How much am I going to allocate for eating out? Your budget should include money that you actually save from each pay cheque
2. Avoid Renting – Live at home rent free for as long as possible. Rent accounts for up to 50% of many people’s net income each month. If you can save this, it will go a long way towards building that down payment
3. Take Public Transit – Avoid buying that flashy new car for as long as you can. They are an expensive depreciating asset. Insurance, gas, parking, car loans, and maintenance all add up to a big number.
4. Use Any RRSP Money Towards your Down payment – set aside some money to contribute to to an RRSP on each pay check. These dollars can be used tax free towards your down payment. Refer to my blog for more info.
5. Get in the market as soon as you have your down payment This will require compromise on your first home. Think about buying a home in an up and coming neighbourhood that needs a bit of work. Most first time home buyers want fully renovated and you pay a premium for this.
If you follow these six easy steps, you will be a home-owner before you know it. You will be the envy of your friends, as they still look at home-ownership as a distant pipe dream. Buying your first home is not that hard to do if you are a bit disciplined.
Skyden Dredge says:
Thanks Jody for sharing such a beautifully written article. Many of you dream of owning a home. But in many cases, your dream does not materialize due to lack of proper planning. Your indiscretion in your financial behavior often comes in the way of the realization of your dream of owning a home. You splurge, spend excessively and your dream remains a dream only. This article has given some valuable suggestions on how to build up savings and how to utilize your savings to purchase a home of your own. With financial discipline, self-restrictions and proper planning you can make your dream come true.
thanks Skyden. I wish you the best of luck in pursuing your dream. It is achievable!