Deposit power-saving ideas

Heroic saving measures are needed for a first-time buyer to buy-in today's housing market.

You could ask mom and dad for help with the deposit monies, raid you registered retirement savings plans to use the federal Home Buyers' Plan or simply save - put money away week by week over a period of years to build a down payment.

However if willing, you could make sacrifices on all your spending!

Here are ways to power-save your way to a house down payment:

1.  Move in with your parents and 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 costs of rent.  You'll pay your parents a token amount of the rent, but most of your savings will go directly into your house down payment fund.

Yearly rent at $800 per month: $9,600
Minus token rent payment to parents: $2,400
One-year savings: $7,200

2.  Move down one level of rent
If you have a two-bedroom apartment, try a one bedroom. Or, try 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.

Yearly rent at $800 per month: $9,600
Minus yearly rent at $650 per month: $7,800
One-year savings: $1,800

3.  Sell your car and take the bus
You'll save on fixed costs such as parking, insurance, gas, maintenance and possibly car payments.   Rent a car or use care-sharing service for those times when the bus won't cut it.  A cheap bike will help you save on bus fare.

Estimated annual cost of gas, insurance and maintenance and parking: $5,000
Minus estimated annual cost of a bus pass and occasional car rental: $1,500
One-year savings: $3,500

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.

Estimated cost of buying lunch at $8 or so per day: $2,000
Minus cost of spending about $15 per week to stuff to make your lunch with: $750
One-year savings: $1,250

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 accomodation 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 home town.  This is good practice for when you own a home and find that fancy vacations are unaffordable without going into debt.

Summer vacation somewhere in the U.S.: $2,500
Minus the cost of a Staycation: $500
One-year savings: $2,000

6.  No pets
Buy a house, and then get a dog, car, ferret, parakeet or whatever.  Pets don't cost a lot on a day-to-day basis, but vet bills will blow your mind if something goes wrong.  Protect your house down payment fund.

Food, vet, toys, etc.: $500
One-year savings: $500

7.  Put a $100 price limit on birthday presents
Extravagant presents are fun to both give and receive.  But the're a luxury for people who are more financially settled than someone who is madly saving for a house down payment.

Yearly cost for a couple of buying presents for various occasions: $1,000
Minus using the $100 present limit: $500
One-year savings: $500

8.  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 smart phone, 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.

Yearly cost of cable and home phone: $1,200
Minus approximate cost of Netflix subscription: $110
One-year savings: $1,090

9.  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 his one is too expensive for people who are set on buying a house.  Aim to eat out less often, and rather than pay market-up restaurant or bar tabs, grab a beer from the fridge.

Annual cost of spending $250 monthly: $3,000
Minus half that annual cost: $1,500

TOTAL ONE-YEAR SAVINGS FROM ITEMS 1-9: $19,340

The power-saving tips mentioned above were found in a Globe and Mail article 'Nine ways to power-save your way to a down payment'.

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