If you're a millennial considering buying your first home, congratulations! You're probably excited until you remember: houses are expensive and—regardless of your current financial situation—you'll likely need to save money to afford one.
This can be intimidating for anyone but, according to a recent survey, millennials in particular say it's become more difficult to buy a home. And, those feelings aren't just isolated to millennials who live in expensive housing markets like Vancouver, Torontoand Montreal. A majority from communities across the country agree.
Do millennials struggle with short attention spans and a penchant for instant gratification? Who knows. Do they think saving for a down payment is the biggest hurdle to affording a home? They do.
Worry not! Where there's a will, there's a way and we hope these tips will help you exercise your delayed gratification muscles and save.
Setting clear short and long-term goals can give you a roadmap towards your ultimate goal: homeownership.
It might start with bagged lunches and smaller investments but, in combination, those decisions can help bring you one step closer to where you'd like to be.
Pinpoint your priorities
Start by figuring out what you want in a home. Consider location, size and your desired current and future lifestyle needs. Compare your list with your preferred real estate listings to get an idea of what's available and how much it costs; this will help you adjust your expectations.
Once you have a better idea of what you're looking for, find a REALTOR® to help you navigate the various stages of home buying and ownership. They're responsible for making the home buying process as easy as possible for you. They can also get you the information needed to make an informed decision: comparable prices, neighbourhood trends, housing market conditions and more.
Once you know your price range, you can use a mortgage calculator to figure out how much you'll need to save for a down payment and an affordability calculator to see what you can comfortably afford in terms of monthly expenses (like living expenses and debt payments).
From there, you can build a budget based on your goals. There are several tools, apps, techniques and systems for budgeting, but all of them start with tracking your income and expenses. For example, the envelope system helps you control your spending by putting a fixed amount of cash in an envelope every month for each expense category. Once you run out of money in your “groceries” envelope, you can't spend money on groceries until the next cycle. Whatever tools you choose, budgeting helps you clearly see how much your life costs, where your money is going and where there's room for adjustment.
Saving money, working long hours and side-hustling requires discipline—so try to get comfortable with discomfort. When you feel burnt out, acknowledge it—give it space—but don't let it derail you. Practice things until they become good habits and prove the people who think you're wasting your life on Instagram and avocado toast wrong. Don't forget to reinforce your good behaviour by celebrating the small victories.
Don’t be afraid to get help
Does seeing your friends buy houses on social media make you feel isolated in your struggle? The truth is, you're not alone.
According to Statistics Canada, despite being the most educated generation, concerns have been raised about millennials being “slower to launch.”
If you're struggling, open up about it. It might help relieve some of the pressure and hearing someone else's perspective could be a good reminder that everyone else is working hard to reach their goals, too.
There are also programs and incentives to help make home buying easier, including:
The new First-Time Home Buyer Incentive (launching September 2, 2019) is intended to help qualified buyers reduce their monthly mortgage carrying costs.
The Home Buyers' Plan (HBP) allows you to borrow up to $35,000 from your Registered Retirement Savings Plan (RRSP) to buy or build a home.
The First Time Home Buyers' (FTHB) Tax Credit allows you to claim up to $5,000 for the purchase of a qualifying home, providing up to $750 in tax relief to eligible buyers.
Saving for a home isn't easy, but if you have a plan and stick to it, you'll be on the right track to affording a home that's right for you.
The article above is for information purposes and is not financial or legal advice or a substitute for financial or legal counsel.
Original Article from: Realtor.ca