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How to save for your first home (and get better at going to the gym)

Gym memberships and bank accounts have a lot in common. People open them all the time with the best of intentions to change their ways and reach a goal – and fail almost as often as they succeed. No matter how much we try to save money or work out, it just doesn’t happen.

That’s a problem, especially when you’re trying to reach a big goal like saving to buy your first home.

As the proverb says, the road to hell is paved with good intentions. Here are some ideas to help you get past the first step and actually save for your first home. (And they might help you get yourself into the gym while you’re at it).

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Commit to saving

A key mistake is thinking that taking the first step will cause you to automatically follow through on the rest. Habits are hard to change. And as we’ve all learned from a gym membership at some point, just because you signed up doesn’t mean you’re actually going to go do it.

Start by making a real commitment to saving for your first home. Your mortgage will be a real commitment – with real consequences if you don’t pay – so start acting like you have a mortgage. Give yourself a budget and terms and set up some accountability for yourself. Having your mom call you every week to ask if you met your savings goal could be the motivation you need.

Open the right accounts

I did just say that opening a bank account in and of itself won’t make you save. But just like a gym membership can be a very useful tool when trying to get in shape, the right bank accounts can be a very useful tool when trying to save money.

When saving for a home, there are two accounts you should open to maximize your savings: a high-interest savings account, and a registered retirement savings plan (RRSP).

The RRSP is designed for retirement, but they’re also handy for first-time homebuyers. The home buyers’ plan is a government program that allows you to take up to $35,000 out of your RRSP tax-free to buy a first home. When you make RRSP contributions, you save the tax on the income you used. Saving pre-tax dollars means you can save a lot faster for your new home. And since you can only withdraw from your RRSP to buy a home (or when you retire), the RRSP is a great way to ensure you won’t dip into your house savings.

The catch with the home buyers’ plan is that you can only withdraw money from your RRSP after you’ve entered into an agreement to purchase a home. That means you will need to keep some cash available for things like deposits when making an offer to purchase a home. For this, open a high-interest savings account. A high-interest savings account works much like the bank savings account you probably already have, but offer a much higher rate of interest. This means your savings can grow faster and you can have faster access to your money when you need it – usually within just a couple of days.

Set up a realistic schedule

The key to saving for a home is not giving up avocados and lattes. It’s forethought and planning, and a lot of commitment.

When you opened your gym membership, a plan to “go three times a week” probably wasn’t detailed enough to make it happen. You might have had more success by thinking through the details. Sign up for group fitness Monday on your lunch break, hit the treadmill with a friend for 30 minutes Wednesday right after work, and figure out how to lift weights Saturday morning at 10 am. Knowing what to do and when helps you avoid excuses and make it happen.

The same is true when saving money. If your detailed plan is to stick some money in a bank account every month, you’re probably doomed. Make a detailed budget and decide how much money you’ll save, how, and at what time. A plan to save $250 in your RRSP every payday and contribute 50% of all gifts and found money to your high-interest savings account right away is a lot easier to follow through on than an undetailed plan to save $600 a month.

Goals go a long way here, too. Try using a mortgage affordability calculator to figure out how much mortgage you can afford. Aim to save at least the difference between your monthly mortgage payment and current rent. When you can see progress starting to happen over the long term, you’ll feel better about the actions you’re taking. And if you don’t see progress, you can step back and adjust your plan.

Treat yourself

Sometimes when you join the gym, the only thing that makes it feel fun is the promise to yourself of a cold smoothie on your way out the door. Yes, it’s a bit counterproductive, but it’s also better to go to the gym and drink a smoothie than to skip the gym (and probably still drink the smoothie).

When you’re saving money for a home, the process can take a long time and it can be stressful. Make sure you allow yourself a treat every once in a while, especially if you’re making good progress on your plan. Buy something nice for yourself, let yourself have a latte, and go out for dinner from time to time. It’s better to spend and save than just spend.