Saving for a home – how we did it

Saving for a home.

Saving for a Home

Saving for a home was a goal my family set about 3 and a half years ago. We wanted to buy a home that was our own so that we could customize it to our liking and make it the most efficient home possible. We didn’t want to spend money updating and customizing a rental, because we wouldn’t be able to take those customizations with us when we eventually moved.

Once we paid off all of our consumer debt, we began saving for a home. It was hard, but it was worth it.

Come up with a plan

Before we did anything, we came up with a plan for saving for a home. We wanted to make sure we had a minimum of a 20% down-payment, and we also wanted to have money for all closing costs and new furniture we may need to purchase (we didn’t know if we would have to replace any appliances, so wanted to be prepared for that just in case – and if we didn’t have to, we would use that money to buy other furniture such as a couch, dining set, etc.).

We decided that we wanted to save enough money for a home within 3-4 years. Our real goal was 3 years, but we wanted to be realistic and be prepared if we couldn’t save up fast enough to meet that goal. We weren’t big on setting huge goals back then (we are now, though!).

Create a house fund

I’m a huge fan of having multiple savings accounts for multiple goals. I find it much easier to organize my savings that way and not confuse how much money I have for certain things.

Of course, this meant that when we started saving for a home, we had to create an account for our house savings.

At that point, we had the following savings accounts:

At the end of each month, all of our extra money would go into the house fund.

Set up automatic withdrawals

Just like saving for retirement, we treated our house savings as a regular monthly bill in order to avoid not depositing money each month.

We set up an automatic withdrawal at the bank so that every month a certain amount of money would be taken from our chequing account and deposited into our house fund.

Cut back on spending

This was very obvious for us to start doing immediately. To save more money, we first needed to cut back on the money we were currently spending.

  • We cut our personal monthly allowances in half
  • We only went out to eat about once per month
  • We started clipping more coupons
  • We bought used as much as possible
  • We scaled back on entertainment

These are just some of the things that we did to cut back on spending. Other things we could have done was cancel cable, get rid of our home phone, borrow instead of buy, and be more mindful of electricity and water usage.

Make more money

Of course, one of the best ways to save money is to make more money to save. So, that’s what we did as well. We tried many things to make extra money to put into our house fund.

  • We sold as much as we could (furniture, clothing, housewares)
  • We took on odd jobs
  • We bought stuff at great prices and re-sold it on eBay, Craigslist, and Kijiji
  • We did online surveys
  • I did some freelance writing
  • I even started baking and selling cupcakes (which was huge for me during wedding season)

If there were more hours in the day, we could have worked more and done many more things to make extra money, but we did what we could with the time we had.

All extra money into the house fund

Whenever we received extra money (birthdays, holidays, bonuses at work, tax refunds), we took a bit of that money (usually about 10%) and splurged on whatever we wanted, and the rest went right into our house fund.

We made sure to always allow ourselves to splurge a little here and there, to avoid burning out. In the past, we learned that when we cut the fun out of life in an effort to pay off debt and save money, we became very unhappy. We wanted to avoid that this time, so not only did we include entertainment in our monthly budget (even though it was just a small amount), we also splurged occasionally.

Become more frugal

We really had to change how we were living to be able to save quite a bit of money in just a few years. Although we were already frugal, we had to take frugal living to a whole new level. We had to become super frugal!

  • We did much more cooking from scratch
  • We became huge advocates for menu planning
  • Most of our entertainment was at home, for free
  • When we did go out, we would use coupons and special promotions to save money
  • We re-used everything possible

We did many frugal things to save for a home. Frugal things that we actually enjoyed so much that we still continue to do them today.

A few other things we did to save for a home

On top of spending less and making more money, we also did some other things to help us with our home buying adventure.

Put savings into tax-free savings accounts

My husband and I both put the maximum $5,000 into our tax-free savings account (TFSA) each year. This allowed us to save that money and not have to pay any taxes on it at all.

Borrow from retirement savings

The first time home buyer’s plan allowed us to withdraw up to $50,000 tax-free from our registered retirement savings plans (spousal RRSP). We will have to pay this back in the next 15 years – which I know will not be an issue (it will likely be paid off much sooner).

After just over 3 years of saving money for a home, we made our purchase. We had our 20% down-payment, all of our closing costs and a bunch of money left over to spend on new furniture. We also had money to turn our basement from a big black hole, into an office, playroom, and storage area (we even had a bathroom built down there!).

It was because we had a goal, made a plan, and worked extremely hard, that we were able to purchase our home. Although at times it was very hard and we wanted to give up, we kept pushing forward. We knew that in the end, it would all be worth it.

And it was.

How did you save for your home purchase?


  1. teachermum

    Great article!

    I do find it funny though that the things you list in the “becoming more frugal” part are plain ordinary things that people would have done naturally not so many years ago! Everyone wants everything NOW these days…

    For our down-payment my husband sold his small boat and I cashed in a small RRSP. We were both out on our own so furniture was looked after (it’s been 26 years and we still have a lot of it!) so we didn’t need any money for that. We ended up with about 34% of our home cost in down-payment.

    I do wish the 20% rule were still in place for down-payments. I’ve often heard it said that if you can’t save up that amount you really won’t be able to comfortably afford home ownership, sort of like a financial test right at the beginning. The housing crash in the States sure proved that to be true. Also to buy only what you can afford (and need). No young couple NEEDS a 3000 sq foot house! Now if you can afford it on one wage-earner’s income and keep to the 30% rule, go for it if you want…

    • Cassie Howard

      Wow, you did great on your down-payment! Good for you. 🙂

  2. Jamie

    Excellent article, very helpful and thought-provoking. I however disagree with the other commenter, 20% is a lot and although home ownership is a huge responsibility financially and otherwise, owning a home can be easier than renting, financially speaking. I lucked out and got a 4bdrm home VERY reasonably priced, and the monthly mortgage payment is nearly 1/2 of what I was paying to rent. I realize not all cases are this exceptional but for me, buying was my way OUT of the poor house, literally. I now have more “disposable” income to put towards my consumer debt.

    • teachermum

      The 20% is just a general “responsibility” guideline, clearly some situations fall outside that realm and some people can make them work! I’m glad it did for you.

    • Cassie Howard

      20% was the minimum for us, to avoid having to pay the CMHC fee.

  3. Holly

    Hey, Cassie! Are you doing online surveys? Could you plz share what kind of websites are reliable? THX!

    • Cassie Howard

      I don’t do them anymore, as the time required is no longer worth my time. When I was doing them, Pinecone Research was great. So was InboxDollars.

  4. Jane

    Great job Mrs. J.! Happy New Year to you and your family.

  5. Mrs. B

    Congratulations Cassie! Well done. What a great accomplishment, keep up the great work as you are modelling your values to your children. Teachermum has a great point for young couples about being happy with a small starter home. We have seen many younger couples fall into the the trap of buying a large home, leaving little left over to enjoy life and have seen financial issues ruin their relationships and family.

  6. Sandra

    Great Job! I would like to know more about how you got paid doing online surveys. Is there a site you can refer me to?

  7. Leslie

    What did you buy and resell on Kijiji and Craigslist, just out of curiosity??

    • Cassie Howard

      Anything I could! I had lots of luck with toys and baby clothes, though.

  8. Jen

    To be honest, I’m jealous. I make 14K a year on Ontario disability. I will never own a home.

    • Cassie Howard

      You don’t NEED to own a home. Be happy with what you have. 🙂

  9. Jamie

    The first time home buyer’s plan allowed us to withdraw up to $25,000 tax-free from our registered retirement savings plans each calendar year.

    Hi Cassy,

    You may want to reword that sentence… it implies that you can withdraw $25,000 year after year under the HPB. This is not the case. The maximum you can withdraw IS $25,000 (up to a total of $50,000 if also withdrawing $25,000 from a spousal RRSP), and all withdrawals must be made WITHIN the same calendar year. This is very different from simply being allowed to withdraw $25,000 each calendar year.

    • Cassie Howard

      Thanks for the tip, I will go fix that now!

  10. Dina Mahmutova

    I disagree that if you cannot save for the down payment you cannot comfortably afford a house. We were lucky to buy a house with 100% mortgage, no money down. Yes, we paid almost $9,000 in mortgage insurance (it was added to the mortgage), but in 5 years we brought our mortgage from being 35 years amortization to only 18. With our income and paying rent there was no way for us to save for down payment, but house payments are very comfortable.

  11. mary

    We were fortunate to find & buy a “bank owned, power of sale” large 4 bedroom home, bought it super cheap & in just 2 years have made over $60,000! Great investment!!

  12. Crystal

    We used RRSP funds in 2002 to purchase our townhouse. In 2006 we used our profit from the townhouse to put down on our single family house. Here, nowadays it seems you have to start with an apartment and slowly move up the property ladder.

    We live in BC and in some areas it is crazy expensive. Apartments can start at $300,000 now and houses with a tiny lot almost $500,000. Saving 20 % here in BC with cost of living being so high and rents so high is very hard for most people trying to get into the market.

    I envy the fact that you live in Ontario. What is the average house price in your neighbourhood and what size home and lot do you get for the price?

  13. christine

    I also disagree with the 20% rule. We only had 5% down and we’ve been living in our house for 2 years now with no issues whatsoever (even with a mat leave and apprenticeship thrown in the mix!). We quickly saved for ours by biting the bullet and moving in with inlaws for a few short months. It was very hard but SO worth it!

  14. Heather

    Do you have any suggestions for a single mother of five, trying to save for our first own home?

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