Saving up for a mortgage while still making monthly rent payments might sound like a pie-in-the-sky dream for many, but it is absolutely possible. While it isn’t easy, necessarily, it can be done by implementing the right financial practices while you’re still on the hook for rental payments. If you’re wondering how on Earth you can accomplish this, continue reading. We’re here to help you figure out how you can save up for your homeownership dreams.
4 Ways to Help You Save While Renting
There are certainly more ways to save money than we’re including here, but these four practices are some of the most effective ways to save for your mortgage while still renting.
Pay Off Your Credit Cards First
Monthly payments toward credit card debt is often the largest hurdle that prospective home buyers face when trying to save their money. It’s hard to save, after all, if you are constantly putting money down on revolving debt that includes a high interest rate. Pay off your credit cards as promptly as possible, starting with the highest-interest cards first.
Open a TFSA
A tax-free savings account, or TFSA, is a great way to stash your saved funds. Not having to pay taxes on this money makes these accounts more desirable than savings accounts of other types. You can use the money you’ve saved for your down payment and/or future mortgage payments.
Cut Spending Where You Can
You obviously can’t forego your monthly utility payments, rent payments and other essentials. What you can do, though, is to trim the fat that is taking up too much of your budget. Scale back on non-essential items whenever possible. Cook at home instead of dining out. Rent a movie instead of going to see a show. Create an itemized list of non-essential expenditures that you make on a regular basis. You might be astonished at how much you’re actually spending!
Join a First-Time Home Buyers Program
Some areas have special programs that are designed with the purpose of getting people into homes of their own in mind. Many of these programs help facilitate the largest initial expense associated with getting a mortgage – the down payment – by offering interest-free loans. Even for home buyers with deep pockets, the down payment can be a tremendous expense that they cannot afford outright. These programs make it possible to tackle this expense without additional interest to repay.
Are you unsure as to whether your city has a program of this nature? Give your city hall a call and ask!
Saving up while renting a house or apartment isn’t easy and it does take a lot of time to get yourself on track with any noticeable progress. Don’t get discouraged! Take these steps to help you save your funds without sacrificing necessary utilities and other revolving payments.
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