How I saved $170,000 for my first home

If you struggle to save money, you’re not alone. 

Whether you’re saving for a down payment on a home or for retirement, the rising cost of living can make it challenging to put extra money aside. That is, unless you come up with a strategy.

I used to treat saving money as my last priority. I’d save whatever funds I had left at the end of the month, but most of the time I didn’t have any money left so I didn’t end up saving much. Sound familiar?

However, as soon as I made saving money my first priority, I was able to ‘supercharge’ my savings. Through this simple mind shift, saving money became a lot easier — and I was able to put together a sizable down payment of $170,000 toward the purchase of my first home!

Creating a budget and saving for a down payment

How did I save $170,000?

The key to saving this much money was setting a specific goal. Instead of saying, “I’d like to save up a down payment for a home one day,” I shifted to saying, “I’d like to save up a down payment of $170,000 in three years’ time.”

Once you figure out the timeline, you’ll want to assess whether your savings goal is realistic. You can do that by working your way backwards. In my case, I figured out how much I’d need to save from each paycheque in order to reach my savings goal. I tallied up my expenses and determined the amount I’d have left over and available to put away as savings, then did the math to ensure I could actually meet my three-year timeline.

Piggybank next to a house and stacks of coins

If your savings goal isn’t realistic, don’t be discouraged. By reducing the amount of money you’d like to save, reducing your day-to-day expenses, or by stretching out the time period, you can set a savings goal that’s realistic.

The last step is to automate your savings. Set it up so the money is automatically set aside from each paycheque. By doing that, the money will be out of sight, out of mind, so you won’t be tempted to spend it.

A pre-authorized contribution (PAC) will help you take small, consistent actions so you can painlessly reach your savings goal. You set it and forget it with automatic withdrawals and deposits, so you probably won’t even notice small withdrawals coming out of your main account. But you will notice how much you save over time!

The great thing about this step-by-step strategy is that you can use it whether you’re looking to save $1,000 or $170,000.

Why did I supercharge my savings?

Mackenzie Ngo, Mobile Mortgage Specialist at ACU

Financial experts like Mackenzie Ngo, Mobile Mortgage Specialist at ACU, agree planning is key to home ownership. Saving for a down payment and closing costs now will make you more confident when you’re ready to start your home search. 

I saved $170,000 as the down payment for my first home. That was a specific number I chose based on the kind of home I wanted and the size of the mortgage I anticipated having.

Try out the ACU mortgage calculator to figure out your own targets.

I wanted to have at least a 20% down payment, in order to avoid paying mortgage default insurance premiums. I also didn’t want to end up with a large mortgage I’d be paying down for the rest of my life. 

Saving $170,000 in three years seemed like a realistic goal, so I locked my targets on that number and pushed towards that goal with confidence.

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Related: How a mortgage calculator works

Find your motivation 

I’m not going to sugarcoat it. Saving money isn’t easy, but what really kept me motivated was the purpose of my money. 

So I put the inspiration directly in front of me — placing a photo of my dream home on my fridge. Every day I’d see the photo of the house and it reminded me of my goal and helped motivate me to keep working hard.

Lovepreet Mann, a member of ACU’s Mobile Mortgage Specialist team

And I did work hard for those three years, taking on additional jobs, being very conscious of where and how I was spending my money, saving every penny, and removing unnecessary expenses. It was a challenge, one I’d set for myself, but well worth it. I know that not everyone is in a position to turbocharge their savings the way I did — I had no kids, for example — but anyone can take some lessons from my journey to reach their savings goals. 

It’s likely you have some advantages that will help in your own savings journey. Lovepreet Mann, a member of ACU’s Mobile Mortgage Specialist team, has helped many members navigate buying a home when they have received a gifted down payment. Gifted down payments are just as they sound, funds received from family or friends that are to be used towards a downpayment, and they aren’t taxable. When added to your savings they can bring you closer to owning property. Also, remember the funds in your RRSP can be used towards buying real estate.

Saving and smart investing go hand-in-hand

While saving money is a good first step, you’ll also want your money to grow. To help accomplish this, I saved my money in a Tax-Free Savings Account (TFSA). Paying less tax helped my money grow even faster.

TFSA Savings Plan

Don’t worry if you don’t have a comprehensive savings and investment plan yet. Your ACU financial advisor can work with you to learn more about your life goals and then map out a plan to help get you there.

When you’re ready, the mortgage team can guide you through the steps to secure a mortgage, and the Mobile Mortgage Specialists can set up a convenient place and time to meet. Buying a home can be a challenge, and ACU will support you every step of the way.

As you can see, saving money is a lot easier when you set yourself a goal. The next time you’re looking to supercharge your savings, follow the steps outlined in this article and you, too, can reach your savings goal a lot sooner.

Learn more about how ACU’s mobile mortgage specialists can help you.

We’re looking forward to helping you save for a down payment and help secure the home of your dreams.

Book an appointment online today to speak with an ACU financial advisor, or give us a call at 204.958.8588 (toll-free 1.877.958.8588).

About Sean Cooper

Sean Cooper is the bestselling author of the book, Burn Your Mortgage. He bought his first house when he was only 27 in Toronto and paid off his mortgage in just 3 years by age 30. An in-demand Personal Finance Journalist, Money Coach and Speaker, his articles and blogs have been featured in publications such as the Toronto Star, Globe and Mail, Financial Post and MoneySense. Connect with Sean on LinkedIn, Twitter, Facebook and Instagram.

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