With house prices on the rise, it can be hard to save the money needed for a deposit.
Recent research conducted by RP Data found property prices climbed 4.2 per cent across Australia’s capital cities over the three months of winter – marking the strongest capital gain over the winter months since 2007.
In Dandenong, property prices have risen approximately 10 per cent over the last two years. But while this is significant growth, first home buyers should not be deterred.
There are some easy tricks and tips first home buyers can follow in order to save the deposit they need to buy their first home, including:
Be realistic about your goals: In order to make your savings plan work, it is important to allow for treats every now and again and to reward yourself when you hit key milestones. This will help keep your savings momentum goin
Save a percentage of each pay check: Try saving 10% of each pay. It might mean that you will have to stop buying your lunch each day, but it will be well worth it in the long run.
Eliminate a few little luxuries: Try cutting back on eating out in restaurants, or putting your subscription TV on hold temporarily. The savings you could make on these small luxuries over even just one year can be much more than you think.
Find a high interest savings account or term deposit: By investing your money into a high interest savings account you could be regularly earning interest on your savings. These accounts often cannot be accessed via ATM or EFTPOS, which should also help to reduce any impulse spending.
Pay off your debt: Free up some of your cash by paying down any outstanding debts that you already have. This way you will have more money to put towards your savings, and eventually towards your loan repayments. Plus, it will put you in a better financial position when you apply for a home loan. Keep in mind lenders will assess your ability to borrow funds based on your assets, liabilities, income and expenses.
Rent a room: If you are currently renting, why not consider asking a friend to move into your spare room to help you pay the rent? This means you will be able to save half of your weekly expenses (or more if you’re clever). You may even consider moving back home with mum and dad to save in the final few months.
By taking these few simple steps in an effort to save money for your home deposit you could be on your way to home ownership sooner than expected.