Buying your first home is an exciting time however saving your deposit can seem like a very daunting task! Especially when this is possibly the largest sum of money you have saved in your life. (Not sure how much you should save? Check out our previous blog post “Purchasing Your First Home” to get more information about the process involved and how much you should aim for) As a minimum you need to aim for 5-10% of the property value.
Here are some of our top tips to get you on the way to saving your home deposit faster!
Create a Budget
Without a budget it is easy to think that you don’t actually have any money to save and equally as easy to overspend on things you don’t actually need! Knowing what you spend your money on monthly is a great way to find areas you can save. Go back through your last few months statements and see where your money is going. You may be shocked to find how much you spend on things you don't need!
ASIC provide a great budget planner, get it here.
Prioritise Personal Debts
Once you have your budget set and know how much you can save work prioritise clearing any personal debts. It may seem counter productive to building your home deposit however once your personal debts are cleared this will open up even more money for you to add to your house deposit! As I mentioned in the previous blog post any personal debt is going to be harder to clear once you have a home loan to pay off. Getting rid of any high interest debts up front ensures you aren't paying a high rate on credit cards and personal loans longer than needed.
Set up an automatic transfer
Setting up an automatic transfer from your wages account to your savings account right after payday will help ensure foolproof savings. It’s too easy to make excuses for savings mishaps. If you have the money transfer automatically before you even have a chance to see it you may notice that you don’t need it after all.
Save your overtime and bonus income
If you earn overtime, bonus’s or commissions this is a great opportunity to boost your savings! Stick to your regular budget income and anything you earn over the regular pay amount you have budgeted for should be put to your savings account. These lumps sums will see your deposit boost quickly!
Tighten your belt
Sometimes you have to make sacrifices to achieve goals. This may mean that your weekly take away meal or restaurant dinner becomes a Home Cooked meal for the time being. Instead of buying new clothes for each outing let yourself get creative and create new outfits from your existing wardrobe or do your own manicures for awhile. All these little “luxuries”, however big or small add up and before you know it you could be wasting hundreds of dollars a month on things which are not necessities.
Try applying some of these simple tips and watch your savings grow. You will be buying your house in no time!