I just wanted to take this great article from Rob Carrick, financial writer with the Globe and Mail and make it more focused to people in Ottawa looking for advice for saving for their down payment. The original article can be read HERE. We will go through 9 tips on power saving towards your down payment. Please keep in mind if you are putting less than 20% towards your down payment, you must also prove that you have at least 1.5% in savings on top of the 5% minimum down payment for closing costs.
1. Move in with your parents or in-laws
Let’s face it, rent in Sandy Hill, Centretown, and Lowertown is pricey. A decent one bedroom will start around $900 and can reach $2000 for one of the nice condos easily. A two bedroom apartment starts around $1300 and can go up to $2400. If you have a good relationship with family members that can have you around and help out around the house in exchange for room and board, this is a good alternative to getting the down payment gifted to you if they do not have it. You have to also keep in my mind heat, hydro, more expensive grocery stores (Hartman’s) and parking. Savings could start at $12,000 and head northwards. This could net you that 5% in one year.
2. Move down one level of rental
Do you really need that extra bedroom? If you are serious about moving into that larger place in the future try to think about the future rather than the present. It will force you to save a little more getting used to the smaller confines. Maybe put a reminder on your fridge as to why you are doing so. This could save a couple $400-600 a month. Close to $5000 for the year. Think of the entertaining you can do at your larger place in future 🙂
3. Sell your car and think of the alternatives
Driving is expensive in this city. We have great bike lanes (for summer months) and a decent OC Transpo that you can take in the winter months. They signed a long-term contract so no more strike in near future. Car pooling is a good idea as well. When I drive in Ottawa, I am always amazed by the number of solo drivers. The statistics back this up. We have a great car sharing program called Virtucar that you can use for the weekends, if you need to do so. Savings in Ottawa could be roughly $1500-$2000. Way more if you have an accident to clear up. Insurance alone takes up your bus pass.
4. Stop buying lunch and and high price lattes
This is absolutely huge, especially in a city with a tonne of amazing restaurants facing us at all times and opening weekly. It is also much, much healthier. Take some time on a Sunday to make a number of lunches and maybe treat yourself on the Friday. Keep that end goal in mind. You will be so much happier. Savings at roughly $2-4 for coffee/tea a day times 4 days a week for 49 weeks= $588 a year minimum, $10 for lunch times 3 days a week for 49 weeks= $1,470 a year, minimum. So right there is $2000 at an absolute minimum. This does not include that second coffee or an upgraded latte or those after work drinks.
5. Dial down your vacations
This is hard, for two years try to not take a large vacation but go on a couple shorter ones if you can. Also, we have great places in and around the city, go visit them. You will remember your sacrifice more. If you go down south every year plus another vacation, that could be about $1500-$2000 a person a year.
6. No pets
Once again, hard in Ottawa where it is such a great place to have one, but wouldn’t they be much happier in your new, larger home? The vet bills can make a major dent in your saving plans.
7. Put limits on presents and wedding presents
Another hard one because you love to give to your loved ones, but maybe try making a Pinterest present over the next couple years. You will learn some new skills, be happy with the finished process and keep some savings in your bank account. I can’t price this as everyone is different.
8. Cut your TV and landline
Let’s face it, you can freely stream almost any show or sport event. For sports, get Ad Blocker on Chrome, and go to VIPBOX and every game is on there, usually streaming in HD. A landline is basically useless. Share your Netflix account with three other friends and it is basically 2-3$ a month. Savings… $60 or more a month.
9. Half your spending at restaurants and bars
This is another very hard one to do in Ottawa. We have incredible restaurants doing great things cheaply. Buy that growler or two at a local brewery ($11-$12 plus $4 deposit) and remember your love of BBQing in the summer. Try to make the restaurants a reward for being frugal the rest of the week. Look at Groupons at new restaurants in different areas to try out and don’t go over their limit.
10. BONUS- Look at the cheaper, free events in the city to go to.
Check Reddit.com/r/ottawa for pick up sports, check out Eventbrite and Meetup.com consistently for free events coming up and go to those. There are so many in this city. I go to many of them. If you do not want to try this, message me anytime at 613-294-4475 and ask for some weekly advice.
11. BONUS- As always stick to a budget
I know it is not fun to do, but when you have a goal of that down payment and do not have the gift from the parents or an inheritance coming in, this is the best way to pave your path. If you do not know how to prepare one, please contact me, I will gladly sit down with you, it is what I love to help out with!
