Buying a house is not an overnight decision. For me, it took around 6 years of saving and financial discipline to have enough money for my down payment.
I don’t come from money. My grandparents were farmers and restaurant workers. Legit, my grandfather made tacos for a living.
My parents were the first in their families to finish high school. When we moved to Canada, they had to start from scratch. Thanks guys.
Needs Vs. Wants
I am so lucky that I had extremely hard-working parents who taught me about discipline. Obviously, when I was growing up, being disciplined was not cool. I wanted new things, and my parents made clear the difference between wants and needs. I had everything I needed growing up (food, love, shelter) so I wasn’t really allowed to complain. This is a habit I applied throughout my life. Every purchase I made, I little voice in my head would ask “hmm, do you really need that”. I don’t know how much money this little voice saved me but I’m sure it’s in the 1000s.
Delayed Gratification
Because I wasn’t able to afford things I wanted growing up, I learned about delayed gratification. I learned about discipline and self-control. I learned how to resist the impulses and urges to spend the limited money I had. Just because I have the money to purchase something, doesn’t mean I will go out and buy it. I sit on ideas. I research the product, and if I sit on something long enough, I find that I don’t really need it in the first place.
Aggressive Savings
On top of developing strict spending habits, I had an aggressive savings “plan”. I didn’t save with intent or purpose, I mostly saved because I didn’t know how much the cost of living was and I wanted to be prepared. I didn’t track my savings, but after covering my basic needs and expenses, I used to dump money into my RRSP and TFSA. From ages 18-24 my finances were not organized. I did everything on the fly. But the things that helped me save so much were:
- Taking public transit
- Buying second hand
- Keeping my living costs low
- Working 32 hours a week while I was still in school
- Graduating debt-free
By the time I was 24, I had saved $53,000. I used $50,000 of that for my house purchase and had $3,000 left in my accounts after that. Needless to say, I did not have a decorating budget and my house does not (yet) look like it’s out of a magazine.
Related: What to know before you buy a house
These little life lessons paid off. 6 years of disciplined saving resulted in a 20% down payment on my house.
At the end of the day, it doesn’t really matter how much money you make. It’s how you spend and save that money that makes a difference.
