saving-for-a-condo-downpayment Photo Credit Rafael J M Souza

If you add up your rent over the last couple of years, you’ll realize you’ve dropped perhaps more than $30,000 on something you don’t get to keep. Why not put that cash into a condo?


Even if your lifestyle changes—say you get married, you want to move, or you get a sweet promotion to the Tokyo office—you'll get your money back if you decide to sell.

There are always condo options in Toronto for less than $300,000, which means you just need a downpayment. The current downpayment minimum in Canada is five per cent (i.e. $15,000 or less). Doable.

Welcome to your guide to saving for a condo downpayment!

Look At The Big Number and Know The Enemy

Add up your net income in one month. Now subtract your rent and grocery bills. Everything left is called your 'lifestyle', and everything in this category should be up for grabs.

So where exactly is your money going?

Go to your online banking website. There should be an option to download your account activity into a spreadsheet, so go ahead and get three months’ worth. Do the same for your credit card.

If you alphabetize all the entries, you’ll see the same entries cluster together.

We tend to minimize our errant spending in our minds, and assume our little indiscretions don’t add up to much. But looking at the figures on a spreadsheet, organized and assembled, can be a sobering moment.

Your “occasional” coffee, muffin or sandwich turned into $150 over a few months. Your convenience store whims cost you $70. Ordering pizza was almost $200. And, predictably, evenings out cost a fortune.

Embrace the following alternatives and you can get yourself into a condo within 24 to 30 months:

Switch Up Your Social LifeSavings: $150+ every month

Swap your restaurant/bar nights for dinner parties. This trade-up is a hallmark of leaving your 20s and entering your 30s. It’s classy to cook at home, and bloggers have transformed the dinner party into an art form.

You can feed a small group inexpensively with pasta and tossed greens, grilled cheese sandwiches, vegetable roasts, lentil soups and crusty breads, and so on. The internet is filled with cost-conscious ideas. Or better yet, invite friends to bring simple dishes for a potluck. Everyone brings their own wine—a decent bottle costs about $15—and it’s done.

Say farewell to $7 apps, $18 entrees and two $12 glasses of wine… and tax… and tip.

Find Frugal FoodSavings: $100+ every month

Discount grocery stores can drop your grocery bills by as much as 20 to 30 per cent each month. Freshco, No Frills, Food Basics—they're ubiquitous in Toronto.

Sometimes the fresh produce at these discount grocers is less than the best, so try to supplement your grocery shop with fresh fruit markets. Often family-owned, these tiny markets are usually super cheap.

Stop Splurging On Work LunchSavings: $100+ every month

If you're buying lunch even just twice a week, this is costing you $100 per month, not including the coffees, bagels or other tidbits you're grabbing on the go.

Spend Sunday nights making a large batch of your favourite food, such as chili, soup, rice pilaf, vegetable/potato roasts, grilled chicken or fish, and portion out your lunches for the week.

The “make your own food” diet is cheaper, healthier and officially endorsed by Michelle Obama (and legions of health experts.) Find some great recipes online and make your meals drop-dead delicious; you won’t feel like you’re missing out if you look forward to your lunch every day.

Slash Your Phone BillSavings: $20-$40 every month

Don’t hyperventilate. There are numerous budget phone plans for $30 to $40 per month, with various unlimited options. Even if you're totally, breathlessly addicted to your phone, you shouldn’t be paying more than this during saving mode. Live with slightly fewer goodies for two years and then go back if you need to. But you might not miss your old plan anyway.

Dropkick Your Gym MembershipSavings: $60+ every month

Go for a jog around the block. Do crunches and push-ups in your living room. Watch one of the millions of YouTube videos featuring fitness gurus doing at-home workouts. Volunteer to walk dogs at your local animal shelter. In other words, a gym membership is a waste of your money.

Cash In On Cash-Back Credit CardsEarnings: $200+ per year

Does your bank offer a credit card with a cash-back program? Even just 0.5 per cent gives you a nice cash injection once a year—a decent chunk you can throw into your savings account.

Use your credit card everywhere you go and get at least $200 back once a year.

Rethink Your RentSavings: $200-$400+ every month

Since your biggest monthly expense is rent, this is where you can make your biggest wins.

If you're cohabiting and sharing rent with a partner, you’re in a good position already. But otherwise—if you're single and living solo—ask yourself if you're willing to make a big change to chop your saving schedule in half.

Reduce your rent by moving into a tiny bachelor in a less desirable neighbourhood, living with roommates, or even moving back in with parents. This could mean several hundred dollars every single month. In other words, your saving just went into hyperdrive.

Curb Your CarSavings: $200-$300+ every month

You have a car? In Toronto? You must be a millionaire.

Seriously though, cars are fire pits for cash. Ditch the car, take transit, and buy a sweet condo close to your work and social life.

Transit is the hottest topic in Toronto right now (after real estate), and municipal, provincial and federal governments are finally feeling the heat. Expect major upgrades in the next decade or two, and when transit improves, surrounding neighbourhoods develop and mature, and your condo value will skyrocket.

Good Luck, Now To Get Saving!

Saving for a condo downpayment will require organization, discipline and perhaps a fundamental shift in your lifestyle. But buying a condo is a two-for-one deal—it’s a place to live, but also an investment with an amazing return.

For some lucky folks, it’s even a lottery ticket when values go through the roof. It’s worth the sacrifice.

Consult your bank to open a savings account and get financial advice. Use mortgage calculators online to see what your monthly mortgage payments will be (but don’t forget the maintenance fees, from $200-$500 per month.) And visit Toronto Storeys often for more condo tips!

Personal Finance