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Buying a home is a dream of so many Canadians. They want to have a place to relax and enjoy their retirement period.

However, a survey revealed that almost one-third of Canadians (under 40) have given up on buying their dream house. The reasons could be:

• Increasing property rates
• Bad credit score and history
• Scanty net income
• None to low savings

Moreover, the pandemic further impacted the monetary market, adding more to the prices and premium rates.

However, you can still save up good for your house by following simple credit tips and adapting effective financial habits. So, Let’s Get It!

Best Credit Tips For Your Dream Home

Down payment, interest or premium rates, shifting, there’s so much related to a home you need money for.

But surely, saving for the down payment might be the most daunting among all the home buying tasks. So, here are easy ways to save money for your home:

1.  Make Financial Goals!

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You have to start somewhere, so why not do it by setting some financial goals?

As you know, saving for a home is not a one-time thing unless you hit the #1 lottery prize. So, you have to take baby steps to achieve your dream. Here are some financial goals to make in 2022:

1. Set a spending and savings budgets
2. Be determined to earn passive money this year
3. Open a tax-free savings account
4. Understand money and how a mortgage works
5. Decide how much you need to save and give yourself a timeframe it

But, we all know setting goals and achieving them is a totally different concept. Looking at your slow progress and quick rate increasing, it’s only understandable you lose hope and motivation to continue.

If you ever feel like giving up and being in ⅓ of Canadians who quit money-saving for their dream house. Ask yourself these questions:

• Why do I need a home in the first place?
• Will I be happy being homeless in my old age?
• What’s stopping you from saving money?

Saving for your home depends more on your priorities than the market rate. Yes, it increases and decreases, but if you’re not serious enough to get your dream home, the real estate premiums really don’t matter.

2. Save More, Spend Less!

The best credit tip to start saving is by cutting down your spending.

No, we aren’t implying you starve yourself to death or live like a poor man but avoid things that you can. The key to saving more is by literally starting to do it!

• Do you eat out four times a week? Reduce the number to two!
• Do you overspend while grocery shopping? Make a list before going out!
• Do you buy anything and everything on sale? Only get those things you really need!
• Do you max out your credit card often? Get a credit card that offers rewards and bonus points!
• Do you have to buy new clothing items once every two weeks? Reduce it to once a month!

In fact, you can wait for the seasonal sales to buy anything. The point is to save money while avoiding unnecessary and big purchases.

3. Don’t Rely On Single Income Source!

The ideal thing to save money for your house down payment is increasing your income streams. Yes, you can’t entirely depend on your single self-employment or another job.

Let’s be honest:

• You need to pay bills
• You must attend occasional family events
• You have to see your friends now and then
• You get tempted by the beautiful clothing, jewelry, other items

And, right when you think, okay, now everything is sorted out so you can add something to your savings account. Boom!

Here comes your credit card bill, insurance payment, or any other unexpected expense. Heck! If nothing, you don’t even realize that it’s the tax season in Canada.

So, the best you can do is increase your earnings! Here are some tips:

1. Do you have excessive clothes? Start selling them for a reasonable price!
2. Can you draw? Try becoming a small-scale artist!
3. Do you know how to write? Get content tasks you can manage with your job!
4. Are you good with the graphics? Offer logo making or presentation designs!
5. Do you have a few spare hours on the weekends? Get a pet-walking or babysitting job!

There are endless ways to make money online and offline. All you need to do is try and do your best.

When you have more than one way of earning money, it becomes easy to set something aside to save for your dream home.

4. Build Credit & Improve Credit Score!

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We are discussing the credit tips for home saving, so how can we forget to mention the most important thing you can do? Of course, we can’t miss it!

“The better the credit score, the better your chances of getting a house are!” 

Wondering how?

• The main benefit of a good credit score is the increased chances of getting a discounted interest rate
• Your good credit history can convince your lender to offer you good mortgage conditions
• Your excellent credit score range can help you get the minimum down payment in Canada

Yes, it’s that important for your house buying journey! Bad credit history and score will only make things challenging for you. Here’re some credit rebuilding tips you can follow:

1. Use a secured credit card or a credit rebuilding card
2. Keep your credit report free of errors
3. Follow a budgeting goal to avoid maxing out your card
4. Activate automate payments to pay bills on time
5. Consider credit-building loan

The key is to keep using your card effectively to build a good credit history while avoiding anything that can result in a negative balance or mark.

5. Register For A TFSA (Tax-Free Savings Account)!

According to Investopedia, a TFSA is an account that can hold cash, interests, dividends, and other savings without tax liability.

Moreover, it can have:

• Prize bond
• Securities
• Capital gains
• Mutual funds

Amount saved in and withdrawn from your TFSA is tax-free, so you can really save some good money for your house down payment or mortgage.

6.  Use Technology For Tracking Progress

Setting saving goals for your house and starting working on them is not enough anymore. You have to keep pushing yourself to ensure you have enough when you need to buy a house.

Mainly, you need to have a clear mindset like “This is the amount I need to save before the year-end!”

Then, take assistance from technology to track your progress. This way, you can save more or less every month, depending on the goal.

• Prepare an excel sheet offline or use an online Google spreadsheet to record every spending and saving
• Use an expense tracking app or software to keep everything accurate

The right goals can give you a heads-up on how far away you are from your savings goal.

7.  Consider CD To Keep Your Money Lock

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If you have a short-term savings goal for your house, getting a certificate of deposit can be a great idea to lock your money.

Honestly, you can never be sure about the money unless you have paid the lender the down payment or signed the contract with the homeowner.

Here are the reasons by Discover why you should consider a CD for saving money:

• It can help you increase your money despite the market conditions
• Many FDIC approved companies offer CD services making a safe and fraud-proof money-saving way
• You can lock your payment on a certain interest rate, so there are fewer chances of loss

It’s always good to know the importance of multiple income streams when it comes to saving credit for a house in Canada.

8.  Improve Your Income Stability

Do a clear assessment of your earnings and expenses. Note down where you are spending more and think of ways to cut down the cost and save more.

If you find it hard to save money every month, learn to stabilize your income and find a balance between your gains and expenditures.

• Do you have a high debt-to-income ratio? Start by reducing the percentage!
• Do you have multiple loan payments to make? Start by paying down all the small ones, so you only have to focus on the big loanin the long run!
• Do you have an outstanding balance in your credit account? Make an effort to clear your monthly bill!

Of course, you can’t save a huge sum at once, but you can start taking baby steps to the road leading to that.

Bottom Line

Saving money for a down payment or mortgage can’t be intimidating. But, you don’t have to give up on your dream just because you find yourself lost.

There are endless money-saving tips that can help you in your house-buying journey. So, give this guide a read and find the best ones on one platform!