While 83% of first homebuyers say they are prepared to sacrifice aspects of their lifestyle in order to get onto the property ladder, the majority only plan to save for an average of 1-2 years before buying, according to the 2013 Mortgage Choice Future First Homebuyer Survey.
The annual study of more than 1,000 Australians revealed that despite rising property prices, one in four future first home buyers are still only saving an average of 10% of their monthly income after tax - similar to 2012 when property prices were on average 8.7% lower.*
If Australians are serious about getting on the property ladder, they need to knuckle down and start saving a deposit sooner rather than later.
Start by working out a detailed budget to remove any unnecessary spending. It might sound simple, but the golden rule of saving is to spend less than you earn. By putting together a comprehensive savings plan, and sticking to it, you will be sure to achieve your savings goal.
Of course, just because you implement a detailed budget doesn’t mean that you need to cut out all of life’s little luxuries – If you are realistic when setting your savings target, you should be on your way to home ownership in no time!
Here are a few ideas to consider when trying to increase your savings and be closer to owning your first home:
Become a VIP member – Sign up to be a VIP member at your regular shopping spots. Whether this means you will get a few dollars off per ticket on a trip to the cinema, receive sale prices at your favourite clothing stores, or earn a supermarket discount voucher for collecting points.
Savings landlord – Ask your parents to oversee your savings plan. If you are living at home, you could pay more money towards your board and have them deposit the extra contribution into a separate savings account for you. Or, if you are living out of home, consider asking your parents to check in with you regularly to help keep you on track to reaching your savings goal.
Home cooked meals – Rather than buying your lunch each weekday, why not prepare your own meals by making a weekly trip to the supermarket. My hot tip would be to write a shopping list and always make sure you go to the supermarket with a full stomach – if you are hungry to begin with, you may buy more food than you need.
Waste not, want not – Eliminate some of your unnecessary spending and/or outgoings. Try cutting back on takeaway coffees, eating out during the week, pay-television, internet or data usage etc. You could even change your social plans and invite friends and family to get-togethers at your place rather than going out where you will be tempted to spend more money.
Do it yourself – Instead of regularly paying somebody else to clean your clothes, wash your car, style your hair etc., try taking time out to do these things yourself and save money in the process. After all, every cent counts in your savings plan!