Saving for your first home deposit can be a bit like standing at the foot of Mt Everest and thinking ‘how the heck am I ever going to get up there?’
Yes, it’s challenging and, yes, not everyone makes it to the top, but if you equip yourself with the right knowledge, tools and discipline, you’re giving yourself the best chance of climbing that beast. In this post we’ve put together some tips to get you on your way.
Get smart with your money
Despite what everyone is going to tell you, you don’t have to live on baked beans and instant coffee for six years while you save. Don’t force yourself to live on the breadline, but don’t be wasteful with your money either. For items where the brand doesn’t matter – for example, laundry detergent or pantry basics like flour and sugar – buy home-brand labels at discount stores. However, if you can’t bear the idea of cheap chocolate, then buy the brand you really like. You need to treat yourself to a little luxury every now and again.
Pay your savings account first
You’ll find it much easier to budget if you save your money as soon as your pay hits your bank account than if you try to save what’s left over at the end of the month. Set up a high-interest account and have 10% of your salary paid into it, then make yourself live off the remainder. As Muddy Waters sang, you can’t spend what you ain’t got.
Live like your grandparents did
In other words, be frugal. And the number one tip here is no surprise: Spend less. Did your grandparents live without pay-tv, monthly manicures, personal trainers, the latest mobile phone, café lunches and brekkies etc.? You bet they did. Work out what you spend your money on every month, then cut back on non-essentials. If you still believe your money disappears into a black hole, try using an app like TrackMySPEND to see where your money goes.
Have an online garage sale
We all have stuff we don’t need. Take stock of your handbag collection – how many of them do you actually use? Is your wardrobe bursting at the seams? When did you last ride that bike in the shed? One person’s trash is someone’s eBay treasure!
Get professional advice
With the First Home Owner Grant it might even be possible to buy a property with less than the usual deposit! That’s why we recommend getting some professional advice. For example, we're partnered with a number of mortgage brokers to offer a range of finance solutions specifically tailored for first home buyers' needs. They can tell you how much you can afford and assist you in getting pre-approved. You could be in your brand new home sooner than you think. Find out more at www.homesolution.com.au