A: There’s been a lot of concern in the news lately that Millennials are finding it difficult to purchase a home and that home ownership may not be possible for this generation without family help. This is not a unique situation but a common concern that has been raised over the years with different generations. While it may not be possible for the majority of adults in their 20’s to mid-30’s to afford a single detached home in Vancouver or Toronto without family help, home ownership in different forms (condos, townhomes) and nearby locations is possible with a solid game plan.

If you’re serious about owning your own home within the next 10 years, below are 6 must do action items to turn your dream of home ownership into a reality. If you’d like to learn even more about any action item, we’ve also included links to more in-depth help on each subject.

1. Determine What Home Ownership Looks Like to You

Do you want to buy a detached home, a townhouse or condo, and where will it be located? If it’s a detached house do you plan on having a rental suite to help out with your mortgage? You’ll need to determine the amount you’re willing / able to pay for a home and how much you will need to save up to cover the cost of the down payment and closing costs.

Your down payment can vary from 5% – 20% of the value of the home depending on if you plan to take out mortgage insurance or not. Mortgage insurance is expensive so it’s best to carefully consider your options. It may be helpful to meet with a mortgage broker or a mortgage lender at your financial institution to gain a better understanding of the costs associated with buying your first home.

How to Tell if You’re Ready for a Mortgage

2. Create a Budget to Help You Save

With your overall goal in mind (the amount you need to save) break it down into the amount you need to save each year and each month. Depending upon your current situation you may need to focus more on paying down debt initially and saving more once you eliminate your debt. You’ll need to set up a spending plan to manage your income and expenses so you can fit the amount you need to save up each month into your budget. Track your expenses regularly to keep your spending in check and look for opportunities to reduce your monthly costs.

Calculate Your Budget With an Easy-to-Use Spreadsheet that Guides You

3. Put Your Savings on Auto-Pilot

Ask your financial institution or use internet banking to automatically transfer funds from your regular account into a separate savings account once or twice a month. To help remove the temptation to “borrow” these funds from time to time for other purposes, don’t connect this account to your debit card. Check your balance every 3 months to see the progress you are making. When your circumstances change, an increase in pay for example, look to adjust the amount you are saving to reach your goal sooner.

How to Save a Down Payment for a Home or Any Other Big Purchase

4. Get Out of Debt

One of the biggest threats to a person’s ability to save is debt. I encourage you to look at the total amount of debt you have outstanding and set a plan to retire all of your debt within the next 3 – 4 years. However I wouldn’t recommend putting all of your available financial resources into retiring your debt. It’s important to build the savings habit while you are getting out of debt. Going forward, credit cards should only be used for safety and convenience but never for accumulating debt and carrying a balance. If it’s not in your budget, it shouldn’t be on your credit card.

5 Steps to Get Out of Debt – Small Payment Make it Easier

5. Establish and Maintain a Good Credit Rating

While it doesn’t cost anything to build a good credit rating, having one can save you thousands in future interest charges and make it easier to qualify for a mortgage at a competitive rate. You can check your credit rating for free by contacting the two credit bureaus in Canada: Equifax Canada and Trans Union of Canada. If you need to take steps to address your overall financial situation and credit rating, now is the time to do it as time is on your side.

How to check your own credit report

6. Create a Secondary Source of Income

Consider getting a part-time job or starting a business that won’t impact your full-time employment. The funds generated with a secondary source of income will be a nice addition to your regular earnings and can really bolster your home ownership savings.

Here’s are a few income generating ideas to help get you thinking

The Bottom Line on Achieving Financial Goals and Home Ownership

The old adage “people who fail to plan, plan to fail” is absolutely true when it comes to financial goals. We don’t achieve our financial goals by accident; it takes good planning, patience and discipline to succeed. Follow these 6 steps, stay the course, and you’ll reach your goal of home ownership on your terms.

Related Topics:

• Should I Buy or Rent My Home?
• 6 Things No One Tells You When Buying a House
• Strategies for Saving Money in Canada