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    First home savings strategies for young adults

    Owning a home remains a significant milestone for many individuals and families in Ontario. Rising real estate prices paired with steep interest rates can make the prospect of buying a home feel daunting, particularly for young adults. Yet, with careful planning and smart financial strategies, it's still possible to achieve this dream of home ownership.

    Here are our top tips to help young adults save and prepare to purchase their own home.

    1. Establish a clear budget and savings plan

    Understand your financial position

    Start by assessing your current financial situation. Calculate your income, expenses, debts, and credit score. This step is crucial as it paints a clear picture of how much you can realistically save and how much you can afford to spend on a property.

    Create a realistic savings goal

    Set a specific target for your down payment. It’s wise to aim for at least 20% of the property's value to avoid mortgage insurance. Consider the housing market in your desired location to estimate the required amount realistically.

    2. Prioritize saving and cut unnecessary expenses

    Automate your savings

    Set up automatic transfers from your chequing account to a separate savings or investment account. This "pay yourself first" approach ensures consistent savings without the temptation to spend.

    Trim unnecessary costs

    Evaluate your monthly expenses and identify areas where you can cut back. This might involve reducing dining out, canceling unused subscriptions, or finding cheaper alternatives for certain services.

    3. Explore First-Time home buyer programs and assistance

    Research First-Time Homebuyer programs

    In Canada, many federal and provincial programs exist to assist first-time homebuyers. These programs often provide incentives, tax credits, or financial assistance for down payments. Coming soon to Kawartha, a first home savings account (FHSA) is a registered plan allowing prospective first-time home buyers to save for their first home tax-free (up to certain limits).

    4. Invest wisely and grow your money

    Explore investment options

    Consider investing a portion of your savings to help grow your money. Consult with a financial planner at Kawartha to understand the best investment options based on your risk tolerance and time horizon.

    Utilize Tax-Free Savings Accounts (TFSAs) and RRSPs

    Take advantage of tax-sheltered accounts like TFSAs and Registered Retirement Savings Plans (RRSPs). These accounts allow your money to grow tax-free, providing a significant boost to your savings.

    5. Stay informed and flexible

    Monitor the real estate market

    Stay tuned in to housing market trends in your desired location. Prices and interest rates can fluctuate, impacting your purchasing power. Being well-informed can help you make timely decisions.

    Adjust your plan when necessary

    Life is dynamic, and so are financial situations. Be prepared to adjust your savings plan if circumstances change. Flexibility is key to staying on track towards your goal.

    Buying a home in Ontario can seem challenging, especially for young adults. However, by adopting smart financial habits, staying disciplined in saving, and leveraging available resources, achieving homeownership is a realistic goal. Remember, it's not just about saving money but also about making informed financial decisions that set you on the path to securing your dream home.

    Ready to get started?

    Kawartha Credit Union's Breakfree Plan helps navigate the path to financial independence with advice, products, and services that are suited to the unique financial needs of young adults.
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