Give Me Back My Five Bucks

How I saved for my down payment

Somebody recently asked me how I was able to save up for a down payment on my townhouse. I wrote this post, and then sat on it for a while (like I usually do, because blogging is scary). I realize that sometimes I can sound so ridiculously positive that it might be perceived as if I don’t know how hard it is to actually save money. My goal is never to alienate anyone, or make it sound as if I don’t understand. I’ve come a long ways since being a crazy shopaholic in debt, but I certainly haven’t forgotten what it felt like. Anyway, onto the post…

I live in Vancouver, and most of you know how ridiculous the real estate prices are here. To give you an example, according to the Real Estate Board of Greater Vancouver, in June the benchmark price for a detached property in Vancouver was $901,680 – which is up 13.4% from June 2010. And the price of an apartment unit? $405,200.

Do you want to know what the median household income is for Vancouver? $47,229.

Still, the statistics didn’t make me any less determined to become a homeowner. It was the biggest reason why I wanted to get out of debt so quickly after college. I knew that in order to be able to buy a place of my own, I needed to live a debt-free life. Getting rid of my debt meant I could save money faster for a down payment, and position myself in the best possible way to qualify for a mortgage.

I ended up putting $25,000 down on my townhouse, $17,000 towards paying off my car loan, and an additional $10,000 saved for closing costs, renovations, and furnishings.

Here’s how I did it:

Getting out of debt & saving for a down payment became a priority
From when I graduated in 2006, up until the present (5 years), I grew my net worth from -$20,000 to +$63,000 (a difference of $83,000). It wasn’t easy. Especially on a modest salary. Since graduating, I’ve made an average of $44,000/year at my full-time job over 5 years and 6 jobs. Not a lot of money, right? So I knew that in order to make my dream of home ownership a reality in Vancouver, I’d have to make some serious cuts to my budget and increase my income significantly.

So in the past 5 years, I went about creating multiple streams of income, and did everything I could to make extra money. I’ve had two full-time jobs at the same time (a 3-month time frame). Took on graphic design contracts. Started freelance writing. Sold stuff on eBay. Worked for $8-10/hour at a part-time job for years. YEARS. The list goes on. Sometimes you have to do un-glamorous work in the short-term in order to achieve a big goal. You may not like it, but if it serves a purpose and is helping you get to a better place in life, then it’s worth it. Just stay focused and keep your eye on the prize.

I built my budget backwards
When I decided to become a home owner, I knew that I did not want to give up my $700 per month contribution to my RRSP. The idea of owning my home is a big deal, but retiring early and comfortably is my most important financial goal. So, keeping that in mind, I started by subtracting $700 from my net income. Then, I subtract my mortgage. Then, amounts for traveling, emergencies, property tax, home repair, auto insurance, and general savings. The money that was left over after all of my savings goals were met, is what I live off of every month.

So when you’re trying to save up for a down payment, you can utilize the exact same method. Figure out how much you want to save, and the number of months you will be saving for. Then each month, pay yourself first by deducting the required amount of money from your net income, and live off of the remainder.

You might find that by building your budget backwards, you won’t have enough leftover money to live on. This is when you have to decide whether to save at a slower rate, or increase your income. My choice was to increase my cash flow. I don’t work multiple jobs because I can’t get by on just one income – I work multiple jobs so that I can save faster.

Utilize the Home Buyer’s Plan
The Home Buyer’s Plan allows you to use up to $25,000 of your RRSPs towards the purchase of your first home – tax free! You have up to 15 years to repay the amount used, so for each year of your repayment period, you have to repay 1/15 of the total amount withdrawn.

So in order to maximize my ability save for a down payment, I tried to build up my RRSP account as quickly as possible. Then, I would reinvest my tax refund back into my RRSP for an even bigger gain. In 2007 (the year I got out of debt AND worked two full-time jobs at the same time), I was able to max out RRSPs with a contribution of $15,213 (and a tax refund of $4,500)! Yeah, I was an animal back then. Haven’t been able to do that since. :(

I had realistic expectations
It is so easy to get carried away in buying that dream property. But I knew that as a first-time home owner living in the most expensive city in Canada, I needed to scale back my expectations. It’s very rare that you will live in your first home forever, so there’s nothing wrong with spending a little less and buying a smaller place.

When I was looking at listings with my Realtor, my decision came down to two properties. One was a small one-bedroom townhouse, and the other was a larger two-bedroom townhouse. The price difference was about $30,000. In the end, I chose the smaller house (even though I could comfortably afford the bigger house) because 1) I know I’m not going to live there forever, 2) $30,000 is a lot of money – even spread over 25 or 30 years, and 3) I don’t need anything more than a one-bedroom home at this point in my life.

Over the last 5 years, I’ve had so many urges to buy a home, but I knew I couldn’t take the plunge until I was completely ready financially. That meant having no credit card debt or any kind of loan. It also meant having a healthy savings account, and most importantly, the ability to budget and manage my money responsibly.

Author: Krystal Yee

I’m a personal finance blogger and marketing professional based in Vancouver. I’m a former Toronto Star (Moneyville) columnist, author of The Beginner’s Guide to Saving and Investing, and co-founder of the Canadian Personal Finance Conference. When I’m not working, you can usually find me running, climbing, playing field hockey, or plotting my next adventure.


  1. Jenny Z says:

    I was talking with some friends last night about getting a job next year and one of them mentioned I should go back to McDonalds. I loved working there four years ago but the idea of going back.. kind of made me feel uneasy. But the thing is that my schools schedule is absolutely ridiculous, my placement forces me to be in and out of the city every couple weeks. So most jobs will have a difficult time hiring me if they know they have to give me 3 weeks off here then 4 weeks off there then 7 weeks off later on. McDonalds, while not glamorous will definitely cater to these needs (and its an easy easy mind numbing job) At this point in my life I'm focused on not accumulating additional debt until I graduate in April and can start working full time. So I can totally relate to what you said about doing un-glamorous work in order to achieve bigger goals. I woke up this morning actually kind of excited to go back to McDs :D because its a solution to my problem!
    My recent post Money Check-Up

  2. Ban Clothing says:

    The best advice someone gave me when I started working was that they didn't get rich working at their fulltime job; it was what they did on the side. This person really encouraged me to look at something I was interested in doing and turning it into cash flow. That way it would be some what of a hobby that also increases my income. I needed a part time job that didn't interfere with my career and allowed me to work whenever I could fit time in. I ended up starting an alterations business out of my house and have never looked back. Having a full time career with a part time job on the side is sometimes stressful however, the only way I could get ahead.
    My recent post Modest Bridesmaid Dress

  3. I don’t work multiple jobs because I can’t get by on just one income – I work multiple jobs so that I can save faster—-I LOVE this! It's exactly what I've been doing–working multiple jobs so I can save faster (and pay down my mortgage/student loans faster). If you don't mind, I'd love to use this as a title for a new post on my blog.
    My recent post Up Yours, Gas Station!

  4. Money Rabbit says:

    Great post, girl! I will always remember in Confessions of a Shopaholic (yes, I've read the books…) that Rebecca Bloomwood's dad told her the key to getting the things you want financially are to Cut Back, or Make More Money. That's stuck with me.

    Right now I'm working part time to generate additional income, but the work so far has been a bit sporadic, and I'm finding it tough sometimes to muster the energy to get the work done. I think it's just a matter of discipline though, and the fact that I haven't finished unpacking yet! However, I'm sure that the longer I keep at it, the steadier my part time work will be, and the fast I can pay off my car loan and live debt free! Yahoo!! You're an inspiration!!!
    My recent post Balance?

    • Krystal Yee says:

      Hahaha I've read all of the Confessions books too. :) Taking on part-time/freelance work definitely takes some getting used to. It took me a really long time to get into any sort of rhythm, and I know how hard it can be to keep on working while in the middle of moving. Three months after moving into my place, I only just got rid of the last of my boxes! Keep up the great work. You're doing awesome.

  5. LittlePira says:

    Great post Krystal! I am so happy I came across your blog a few months ago because you totally inspire me. I'm trying to come out of student debt right now – VERY difficult on just an intern salary of next to nothing. So I've kept my part time job as a waitress (I was very tempted not to) and I'm so so glad I did because it has generated more income than my 'full time job' believe it or not. Once I start working on a real salary – hopefully in the near future – I know I'm going to keep my serving job because not only do I LOVE it, but it will help me significantly in my goal of paying off my debt by next year and beginning to save for the future. Thanks Krystal!
    My recent post My August beverage challenge

    • Krystal Yee says:

      Good for you! It can be tough to get out of student debt – especially on an intern salary, but keeping that part-time job is such a great idea. It just becomes a lifestyle change. I really liked my part-time job – not only for the extra income, but because it provided me with something completely different than my day job, and it was also somewhat social. :) Keep up the great work!

  6. hithatsmybike says:

    Such good advice!!

    I'm not gung-ho about home ownership yet but I have about $6000ish put away for it, not including what's in my RRSP. I add a little bit every month, which can sometimes seem futile when I don't have the intention of buying anytime soon, but at the end of the day I like knowing I've given myself a bit of a head-start for when I do want to buy.

  7. Great advice Krystal. Keep up the good work!
    My recent post Rising Food Prices, Eating Cheaply, and AMEX Deals

  8. LMU says:

    Will you try and expedite paying back your Home Buyers Plan, or just pay back the minimum and stretch it out over 15 years?

    • Krystal Yee says:

      I think my plan is going to be to pay back the minimum of $1,666 for the first year out of my RRSP contributions. Then, for the following year, also contribute the minimum, but put my tax refund from the previous year towards it as well. So it's kind of going to go in a cycle. That way, I'm still somewhat maintaining my current RRSP contributions, while paying off my HBP loan at a faster rate. By doing it this way, I should be rid of my RRSP loan in 5 or 6 years.

      • joanne says:

        it is not to your benefit to over contribute to the payment of your HBP as whatever amount over the required amount will be deducted from your allowed amount to put against your taxes – there by reducing your income tax benefit (refund).__The amount you indicate towards your HBP is still going into your RRSP but it is just on paper. If you put 5000.00 into your RRSP each year and if your HBP plan repayment amount is 500.00 then you put 4500.00 on your taxes but the full 5000.00 still goes to your RRSP account and you get the benefit of the full amount – just not on your income taxes.__Also, you do not start paying back your HBP until year 3 – there is a 2 year "grace" period.

  9. @applecsmith says:

    This is fabulous advice, thanks for really breaking it down and detailing the actual figures. I wish I had read this post a few years ago when I bought my first place, it was waaaaay too big for me and way out of my budget. I've learned my lesson since then, and I agree with your decision to purchase the smaller place, taking small steps and building up to a bigger place over time. Excellent post!

    I also agree, like you said, that it's really important not to have other debt or loans weighing you down. A lot of people don't understand how much that can slow down the speed of progression towards your goal. Bravo to you for doing whatever it took to fulfill your dream of owning a home, by working multiple jobs and really cutting back. You should be proud of yourself!

  10. shoegal0424 says:

    Great post! I was wondering the same thing. I have started cracking down on my own spending recently and did the same thing with the budget. Even though it does not leave me with much I feel that since I live at home I should be able to do it. I have also started making a bit of cash on the side. This post is great motivation for me to stick with it.
    My recent post bottoms up

  11. munchkin says:

    I was just wondering about the process of the Home Buyers Plan, like how long is the process, from how long it takes to get approved to how long it took to get the money out? Was it fairly painless or did you have any problems? I want to do this in the future so I am wondering about that.

    • Krystal Yee says:

      I personally had major problems getting my TD Canada Trust e-series mutual funds out of my RRSP. But it was due to their incompetence, rather than it being a difficult process. Once they figured out what they needed to do, all that was needed was me to fill in and sign a piece of paper. When that was done, I would say I had the funds in my account within 2 business days. Which was good, because I had a very quick closing.

      You can read about my Home Buyer's Plan problems with Canada Trust here:
      … and the resolution here:

      • Kay says:

        We had some RRSP money in mutual funds.. was a 10 min process to take it out of for HBP. Munchkin, I'd suggest you talk to a lot of people who used HBP, find out which was easy / fast and that you are comfortable with and invest your money in it.

        One thing to remember is you can take the money in RRSP as long as it has passed 90 days after investing. So plan accordingly!

  12. Melissa says:

    Great post, Krystal! This is definitely something I struggle with, because I make a modest income and want to own a home SO BADLY, but it's a dream that seems so far away, and I don't even have any debt! (Also, don't know if you noticed, but Toronto recently surpassed Vancouver as the most expensive city in Canada. Umm…yay?) But then on the other hand, I feel like I worked SO hard in high school and during my undergrad to graduate without debt and to make good grades and good connections and have a great resume and portfolio, that this is the first time in my life I have time to actually HAVE a life, so I don't want to work 70 or even 50 hours a week in order to fulfill the first goal sooner, so I just take on the odd freelance gig here and there. It's a weird balancing act. I don't even have a clue how I'm going to get a house on the piddly amount I'm putting into savings every month.
    My recent post Emergency Fund or Bust

    • Krystal Yee says:

      It's definitely a really really crazy balancing act. To be a homeowner in an expensive city, you will probably need to boost your income in order to save up for that down payment. BUT, that means sacrificing other aspects of your life in the process. I think at some point you have to be realistic with yourself: are you really committed to becoming a home owner as soon as possible? Because if so, you'll have to make some sacrifices and work harder. Dig deep and make it happen over the short-term, in order to achieve a long-term goal. Or, are you willing to save at a slower rate in order to work less hours? It might mean postponing your dream of home ownership by years.

      For me, the choice was clear: work as much as possible to achieve my goal as soon as possible. But I can see now that working 70 hours a week definitely is taking a toll on my social life. Still though. To me, it's worth it. To others, maybe not. The personal side of personal finance, I guess. :)

      • Tara says:

        This is true. I am a full time permanent registered nurse with no debt great credit. My partner, also makes a great income. We both came into the relationship with children, we rent a home together and are saving for a home together, and I thought we were doing as much as we could to save for a house, but feel like it is never enough. But I dug deeper, and now truly want home ownership and equity and it’s a priority. No more eating out. Not even a quick lunch. No more buying clothes unless old ones are damaged and need to be replaced. I had to cancel my rodan and fields skin care because it was too pricey. I take the kids for a bike ride or watch a FREE movie on tv or the YMCA. And it sucks people. It’s going to suck for a long time too. I am not perfect. I still get my nails done. I have gone through the lifestyle withdrawals….even cried. My kids haven’t even noticed the changes and like the quality time. I have lost weight because I eat better at home. And at the end of this long painful nightmare is a home that I own and some financial stability for my family.We have a goal and the sacrifices need to be made to move forward.Sure I was living it up going out and shopping but at the same time I might as well set1350$ I pay in rent on fire every month because that’s money I will never see again. Ever. I might even get a part time job at a restaurant to speed things up. There is a difference between looking like you have money and actually having money. I am not too proud to do what it takes for now

  13. Kim says:

    My favorite part about this article is the disclaimer at the beginning. You definitely have compassion.

  14. jesse.anne.o says:

    Wow. I can only save about $6k per year (I work at a nfp and work too much as it is, so I'd have to be careful that supplemental income is "fun" vs burning me out even more than I'm already burned out).

    Since it's NYC, the two price-points I'd be looking @ are:
    $600k 2BR APARTMENT @ 20% downpayment = $120k = 20 years
    $400k 1BR APARTMENT @ 20% downpayment = $80k = 13.3 years

    It's looking more and more like home ownership is NOT in my future in NYC! Obviously, I'll keep saving, though. Maybe I'll move somewhere else without ridiculous real estate prices.
    My recent post Harajuku Columbine, the visual

    • Krystal Yee says:

      Yeah, a big decision I had to make when buying my place was neighbourhood. I live about a 30 minute drive from downtown Vancouver, so I could actually afford to buy something. Vancouver is too expensive for me, with prices quite similar to the NYC price points you mentioned (average 1-bedroom apartment is over $400k here in Vancouver). Cry.

      Also I worked for a NFP as well when I first moved to Vancouver, so I totally understand where you're coming from. Good for you for saving money though! I'm not even sure I was able to save that much when I worked there for the 8 months that I did.

    • Dee says:

      Hi Krystal:
      I love your post, thank you for that. It’s great to read about your experience as my goal is to purchase a home in a few years, I say 2015, but would like it sooner- if possible. I currently have about $6k in savings- which I have placed in CDs (so I don’t touch) and plan on saving about $4800.00 a year over the next 3 years. The last year, 2015- I’ll decide if I want to borrow against my 401k (which is something that I don’t want to do- but can. (only time will tell)

      Thanks again for sharing what you know…It def helps the wheels spin more… :)

  15. @yvrkaren says:

    Great post Krystal. Now that time has past and I can see the end of my mortgage my one regret was not buying the bigger apartment I could have afforded 12 years ago. I'm now looking at purchasing that second bedroom and bathroom. If I had bought it in the beginning it would have been about $30,000 more, but today it's close to $200,000. Having said that though I feel good to be a in my early 40s with a teeny tiny mortgage and property in Vancouver city proper. You've got a great blog here too. Karen

  16. wolfshadesblog says:

    Hi Krystal. I'm amazed that you have your priorities so well established so early in life. I truly wish I'd had the same mindset: to plan for retirement first, and then a house – when I was in my 20's. I'm in my 50's now and have about $20K in debt but am working toward buying a house as a means of having a nice little retirement nest egg later on (because it's never too late). I have a decent pension plan at my work, so there are no worries come retirement time. The only problem is that I'd like to retire a bit sooner than what the plan calls for, which means there will be a hit on the pension payments – hence the requirement for that nest egg, so that I can retire and start living a little better earlier.

    Anyway…. What a breath of fresh air, reading your blog today. I'm putting you – with high recommendation – on my blogroll.



  17. Hi Krystal,

    I did some more searching, and while I could not find much useful info for marketing conferences in Van, I do know that Nanaimo is hosting a "social media camp" a little bit. I know the organizers, and it should be well-worth attending (and it's relatively close to Vancouver, all things considered).
    My recent post undefined

  18. Kay says:

    Fantastic post, Krystal!! Very informative.. and at the same time, very inspiring!

    You had a goal and WORKED towards it diligently, plannign very well! GREAT job!

  19. anonymous says:

    You forgot to mention that you're parents helped you with the down payment, since anyone who followed your net worth updates can see 20k appear out of nowhere…. good job though

  20. loretta says:

    Other than your RSP what other type of savings account did you use? Investment Savings Account, GIC etc.

    • Krystal Yee says:

      At that time, high interest savings accounts were at 3-4%, so the $$ outside of my RSP sat in a regular savings account. Once the TFSA was introduced, I started transferring money there instead.

      I also had a small amount in indexed mutual funds.

  21. Mariela says:

    You TRULY inspired me at the right moment, Im 41 with 3 small kids 9,7,4 and in a very difficult relationship I don’t work so I depend on him for EVERYTHING, and I feel stuck, I sometimes work for him and will be looking at a f/t job after my last child starts school. My BIGGEST dream is to buy a place of my own, so my kids can live more comfortable but I don’t know how to begin…:( It is also hard to work multiple jobs when you have kids and no help….I also wish I could of have your mindset and your vision…But coming across this blog will hopefully lift my spirits and help me get back on my feet, I want to find a job, buy a house, be financially comfortable and be able to do it BY MY SELF….

  22. mary smith says:

    Many people say “work multiple jobs”….well, what about the people (such as myself) who have a job that doesn’t allow you to work any other jobs? Yes it’s true. I work in the medical field, and part of my contract I signed when I got my job was that you could not work for another company at all, due to the requirements of the company……I would LOVE to get a side job, however I am bound to work only for my company……..It’s ridiculous, however it is part of the job description we all signed when we were hired. I am in a supervisory position…so “technically” the only time another job would interfere with my job is when I am on call, or get stuck working later than usual business hours, which happens when dealing with new clients…..otherwise I would be more than willing to get a 2nd job…….my job pays ok, not great for the position I have. HOWEVER between paying rent, utilities, groceries, car insurance and student loans, I literally have close to nothing left each month…and no I don’t go out much at all….work & home basically.

  23. James says:

    Hey, great post Krystal. Your advice about creating a backwards budget worked well for me and helped me figure out what my priorities were. Unfortunately I had to cut out a lot of what I enjoy doing (like eating out), but that was a better choice than not having insurance. One thing I did that helped me save a few hundred a year was to bundle apartment/renters insurance with car insurance, which is something companies offer now. They call it “carpartment,” but whatever you call it, it helped save me about $200/year. Hope that helps!

  24. Daniel says:

    Hi Krystal,

    Very informative post. I myself just recently moved to Vancouver for a job(having graduated university just this past Winter), and find myself in quite a similar situation to yours, in my desire to own a piece of property as soon as possible.

    Having just moved from Ottawa, the price of real-estate here really hit me. But i’ve been pretty adament on saving up my money and have been exploring other ways to increase my income on the side. Are you aware of some good freelance based websites/orgs, one could utilise to do so? I’ve also been debating wether to invest in a TFSA vs an RRSP account, and would love to hear your opinion on it.


    We offer fast , affordable and reliable loans for everyone. Contact or +13234024181 (SMS us now for fast response) for details on how to get yours

  26. Laura says:

    I stopped reading when you said $44k is not a lot of money. As someone who makes less and is looking for the type of guidance you claim to provide, I appreciated the earlier disclaimer for about ten seconds.

  27. Laura says:

    (I realize it sounds bitter/oversensitive, sorry, just felt the need to point it out as it seemed contradictory)

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