So, you’ve decided you want to upgrade your current home and find something a little fancier. If you don’t want to take on a considerable increase in your mortgage payment, you may need to save up some money to make a bigger down payment. While saving money can be challenging sometimes, with a goal in mind and a plan, you can make it happen.

Here are some great tips to help you grow your savings.

1. Prioritize and Budget

No matter what you are saving for, saving money is all about your priorities. If you go out for food a lot, shop for new clothes and always drive the latest cars, you may need to make some sacrifices. The first step in every savings plan is creating a budget. A budget will allow you to identify where to cut back your spending to redirect that cash into your savings.

A budgeting app can help you determine income and expenses, saving you from doing calculations by hand. When building your budget, remember to keep your goal of buying a fancy house at the forefront of your mind. Browse the luxury homes for sale to determine the type of budget you may need.

2. Pay off Debt

If you are trying to save money for a new home, funnelling extra income into your existing debt may feel counterintuitive. But saving money is difficult if you pay interest on credit cards and other obligations. It’s also important to consider that when looking for a mortgage for your new home, they will look at your debt-to-income ratio.

The more debt you have, the harder it can be to find a lender. The snowball method of debt repayment is a fast and easy way to pay off debt. You start by paying off your smallest debt and then move on to the next smallest. The minimum you used to pay on that balance will help you pay off the next debt a little faster.

As you continue, the snowball effect of your minimum payments adding up will help you make even larger payments on your larger debt amount.

3. Automate Savings

One of the easiest ways to grow your savings is to open a new account and set up automatic transfers from your primary account. This method is advantageous if you are prone to impulse shopping because it makes your money inaccessible. Make sure you pay yourself first every payday. When you automate this transfer, you will never be tempted to skip a week to splurge on a purchase you probably don’t even need.

4. Open a Tax-Free Savings Account (TFSA) and Invest

A TFSA savings account is a great place to save up for the house of your dreams. The benefit of a TFSA is it allows your contributions to be invested, and they can grow tax-free. When you invest your savings, you take on some additional risk that you would not have with a regular savings account. However, it’s worth considering the possible rewards too.

The interest rate on even a high-interest savings account is generally between 1.5 and 3%. A low-risk investment could yield a 5% or possibly even higher return if you have some personal risk tolerance.

5. Live Below your Means

The fastest way to save money towards your fancy house is to start living below your means. This means you need to reduce your expenses while you save and only spend money on necessities. Some of the easiest ways to reduce your costs are to look at areas of your budget like food and entertainment. If you are eating out often, cook meals at home more often.

If you have an extra vehicle that you could do without, consider selling it. Not only could you put the money you get for it right into your savings, but the maintenance and insurance costs you won’t have to spend anymore can also be diverted. They add up faster than you think!

6. Increase your Income

It’s easier than ever to earn money on the side if you’re willing to put in the time and effort. Some ideas for side gigs include freelancing, pet-sitting, or signing up for a rideshare company like Uber. Are you creative? Start up a home business selling the items you create. If you have an extra bedroom, you could rent it on a website like Airbnb. Or, consider a roommate for a more extended period, like six months. Some people even rent out a parking space if they live in an area in demand.

When saving money to buy a fancy house, even small changes in your habits can start to add up. The trick to saving money is to be intentional. Adjusting your spending habits, cutting expenses wherever possible and automating your savings will have a tremendous impact. Start today, and you’ll live closer to your dream home.