Saving for a down payment
For the past few years, I’ve been on auto pilot with my finances. My retirement savings are automatically withdrawn every pay day, and at the end of the month whatever is left over, I put into a general savings account. It’s what I’ve always wanted for myself – to be savvy enough to create a budget and (for the most part) stick to it every month, and to have enough income coming in that I could afford to do the things that I want to do, without financial struggle.
Because my finances are automated for the most part (I still manually pay all my bills), I haven’t had to put in effort to save for anything … and this realization actually made me feel pretty bad about myself. That’s in part because, aside from my long-term goal of early retirement or the occasional big trip somewhere, I haven’t had an actual financial goal in years. I’m talking about a big financial goal that would require me to create a plan and actually work hard to achieve it.
Since RD and I have made it our goal to one day buy a home (probably, maybe sometime this year), all of a sudden my new goal is to save for a down payment, because the amount we put down on our future home is riding on how much I personally can save.
Right now I have $53,000 earmarked specifically for a future down payment (this lives outside of my general savings and my emergency fund accounts). RD has much more than that – so much more that it would actually be impossible for me to match his savings even if I tried my hardest this year. And since we are planning to go 50-50 on the down payment, the amount we will have saved really depends on how much more I can squirrel away.
It seems weird to even talk about saving for a down payment, when I was so sure we would be renters for years. But now that we both understand we’ll be here long-term, it actually does make sense to buy if we can find a place that costs about the same to own as to rent. The only problem is, those places are very rare, and we’re willing to wait until we find a home that we can love for 10+ years – and until the Vancouver real estate market settles down … which is why we have no idea when we’ll end up buying.
Related: How I saved for my down payment
My dream is that we’d have $150,000 combined for a down payment and closing costs, which means I’d have to save $22,000 more to come up with my half. Admittedly, this is a somewhat unrealistic goal considering our travel itinerary this year and the fact that I refuse to lower my retirement contributions, but there’s an outside chance I can get there. Of course, it depends on when we actually decide to buy, but I will still try to come up with some sort of plan to get me as close to my goal as possible. Stay tuned!
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.