How to Save for your First Home in Greater Vancouver
It has always been my dream to be a homeowner. For most of my life, my family has been renting and having a place to call my own has always been a goal in my life. That dream came true this year when my fiancé and I bought our first place together. 2020 has been hard for many, and I feel grateful every day to still have work and be in a position to buy a home during this time.
With that, I want to share the steps I took to save and perhaps you will find it useful if you are in that stage of saving for your first home.
Prioritize
After I got my first “career” job, I had a savings goal of 18K per year for six years. To meet this number meant I would put around 40% of each paycheque towards my downpayment savings goal.
When thinking about any goal, consider the SMART acronym to guide your goal setting:
S – Specific – to save 18K per year.
M – Measurable – each month, I should be saving $1500
A – Achievable – it was achievable.
R – Realistic – with proper budgeting, it was realistic.
T – Time-bound – each month, I had a savings goal that rolled up to the annual savings goal.
Live Below Your Means
To keep my expenses low, I lived well under my means. I didn’t own a car and always took public transit. When I went out to eat, I never ordered alcohol with my meals, happy hour with friends are the best. Specifically, I used to find myself going to Starbucks every morning from Monday to Friday as a routine before work, and perhaps you might find yourself doing the same. After some time and doing the math, I’ve realized that paying $5 for a latte is crazy-expensive. Make your coffee at home.
The above may sound limiting for some, and everyone’s circumstance is different. However, I always reminded myself to think long term instead of desiring the instant gratification I would feel by giving into impulses.
Invest
In this post I share the pros and cons of both saving and investing. I have my funds invested for my down payment savings as I knew it would be a long time, over five years before I took out my funds. With COVID, in March 2020, my portfolio sank 20 percent. That is a risk when investing as you can never time the market. Although that was incredibly stressful, I didn’t sell and was fortunate that my fiance and I found a listing when the market was on the recovery, so I made back my principle plus market gains, which was the perfect time to sell.
The bottom line is that you can do it. It might take a while; however, if it’s your dream, you will make it work. I hope sharing my story helped you save for your first home in Greater Vancouver, Canada.
Thanks for reading,
Michelle
