If you’re a first home buyer, you’ll understand the daunting struggle of saving for your first home deposit. Suddenly the days of expensive holidays, soy milk cappuccinos and lavish cocktails are gone only to sign yourself away to years of debt – sound tempting? We didn’t think so either.
Saving doesn’t always have to be a road of struggle. If owning your own property is something you have always dreamt of, there is a way to reach your goals and fast track it. Follow these five tips to get yourself that house deposit in a year (or less if you’re really dedicated).
2. Budget is your best friend
1. Are you paying too much rent?
First thing’s first; ask yourself if there is a way you can reduce the amount of rent you pay. Maybe the rental market is low and you can ask for a rent reduction or if you have a spare room, bring in a house mate or even a couple to further cut the bills. You can even place your home on Airbnb for those weekends you’re away or sublease your place and stay with family and friends. Take things one step further by pretending to increase your rent and putting the ‘extra’ cash away. This can make an incredible difference and is much easier than you think! There are countless options to reducing your rent just be sure to place this extra cash flow straight into your savings to avoid unnecessary spending temptations.
If you don’t have a budget, now is your time to make one. If you do have a budget, review it and pick out areas where you really don’t need to be splurging. Download a helpful budgeting app or use an old school spreadsheet. Make sure that your expenses are less than your income and work your way into reducing this. Opt for Spotify instead of Spotify premium or go to a friend’s house for dinner instead of that fancy restaurant. Do your research on different providers who offer the same thing for a cheaper price and even cut down to lowering the cost of your gym membership. Again, balance is key here – if you love shoes than allow yourself to purchase new shoes but just don’t go overboard. $100 a week on your wardrobe means $5,600 less a year in your savings.
3. Think about the little things
Do you really need that item on a buy 1 get 1 free deal or a $9.50 juice with your lunch? All of your ‘in the moment’ purchases can add up quite quickly and hinder your saving abilities. Create a weekly spending budget and stick to this as best you can. It is however, important to remember that balance is key. You don’t want to deprive yourself completely as this can discourage you. Allow yourself a few luxury items each week or do your research and find cheaper options of the same things. Even building habits as little as saving your gold coins could add up to a few thousand by the time 12 month’s slips by.
4. You’ve made your choice and now you have to stick by it
Willpower and dedication will play a massive part in your savings ability. Every time you’re invited to something, think about if you are really interested in going or if you’re just going because you feel obligated to. Often, we feel pressured into participating in outings because we don’t want to let our loved ones down but it’s important to remember that they understand your situation and will support you throughout the process. If the group is going out for dinner, why not eat home and meet them afterwards? Never lose sight of the bigger picture when it comes to social situations.
5. Additional income never hurt anyone
If you have spare time why not make a little more cash? Walk dogs, baby sit, wash cards or become a ride share driver. The Territory is finally in line with the rest of Australia with Hi-Oscar launching and Sheba soon to join the ride share industry. By dedicating just a few hours a week to extra work, you can increase your savings significantly over a year – and let’s face it, this is easy money. EBay and Gumtree can also be your next love if you have unused items laying around. What’s that saying again… one man’s trash can be another man’s treasure? If you have a hidden skill you can also work from home thanks to a broad range of freelance websites.
Open up a saving account with no card and a delayed transfer time (around three days is perfect) and put your planned monthly savings along with your extra savings from selling goods, side income and gold coins etc. Always remember to never lose sight of the bigger picture, what your end goals are and to keep a good balance between spending money on things you need and things you want. Follow these tips and you’ll have a house deposit to your perfect first home in no time!