November 10, 2017 by Hayley Dunning
Saving for your first home can sometimes seem like an overwhelming and never-ending task.
Here we have come up with our top tips for how to save towards a deposit so that you can enter the property market that much sooner.
Budget
In order to know how much money you can afford to save, you first need to know how much money you have coming in vs. how much is going out. By creating a budget you will be able to determine the exact amount of money you can start putting towards your deposit as well as identify any areas where you can cut back or find extra savings. Make sure you‘re accounting for all expenses, no matter how big or small.
You may find that after bills and expenses, you have $300 left from your fortnightly pay check to put towards your savings. You could easily increase this by implementing small changes into your everyday life to free up some spare cash. Instead of buying a coffee and lunch every day, buy a jar of instant coffee and bring lunch from home. If you’re spending $4 on coffee and $10 on lunch every day, this is costing you $3,640 a year!
Lump Sum Payments
It’s hard not to indulge when you have some spare income but try to resist the urge and put that money straight towards your deposit. If you find yourself with a lump sum amount of money from a bonus or commission, tax return, dividend yield, etc, put it straight towards your deposit! It will get you that much closer to reaching your goal and it will be well worth forfeiting that shopping spree when you can buy your home that much sooner!
Manage Debt
It can be hard to get ahead when you are trying to save, pay down your debts and manage your daily living expenses. Our advice would be to start paying down your debts as soon as possible, the quicker you have paid off a car or personal loan, the more money you’ll have to put towards your deposit.
Credit cards are also another form of debt, especially in the eyes of a lender. Instead of simply making the minimum repayments each month, try to pay down your credit card balance as soon as possible as not only will this mean reducing your debt sooner, you’ll also be charged less in interest.
Prioritise Savings
Often we plan to start saving but it doesn’t always happen. In order to really get ahead, you need to make your savings a priority. We suggest setting up direct debit payments for bills and regular expenses such as your phone bill, gym membership, rent, etc to ensure that everything is paid on time so you won’t be tempted to spend this money elsewhere or incur any late fees.
We also recommend setting up direct debit transactions for your savings, after completing a budget and determining how much you can save per week, fortnight or month, arrange for this amount to be taken out of your account and put into a sperate savings account. This guarantees that you will always prioritise your savings, reduce the risk of you spending that money on something else and ensures that you will be on the way to buying your first home sooner!
If you’re a First Home Buyer looking to take out a mortgage, find out your borrowing capacity or determine your eligibility for the First Home Owners Grant, talk to us today to see how we can help.
Your local mortgage broker, Brice Booker, can help with everything from purchasing your first home, refinancing, car & personal loans as well as commercial loans.
Call our office today on 07 3211 7744 or book an appointment online here.