Saving a deposit for a new home has never come at a more critical time. With interest rates remaining at a record low, it is your opportunity to secure a mortgage with more affordable interest rates sooner rather than later.
To help you save your deposit, we have compiled our top saving tips to aid you in getting the house you want as fast as you can.
Now we’re sure you have all heard the number one saving tip of cutting back spending as much as possible, spending only on those necessary items. However, this is often easier said than done and is simply unrealistic for most. We all grow accustomed to those extra purchases and in order to really save well you must choose to be smart with your money. Living just above the poverty line and cutting back spending cold turkey style is just unsustainable. Instead, be conscious not to waste your money.
Where you can, cut down on things you don’t need to buy. For example, consider whether you really need that new outfit for the party next week or that vase that matches your couch cushions better than the existing one. If grocery shopping is what’s chewing up all your funds, try substituting branded products for with cheaper home-brand options.
However, remember not to skip out on things that you enjoy. If you favourite wine is a little more expensive, purchase it and just compromise on another item instead. Compromising on everything you love will start to weigh on your mood and moreover, your motivation to save. Keep in mind that emotions can plan a huge role in saving money for a home deposit, and instead, making realistic changes will help you to remain consistent.
Keep it constant
Putting that little bit extra away can really make a huge difference to your deposit. However, the key to saving comes down to habit. Make smart goals that can be implemented every week, month, or pay package that will help you sustain your savings and aren’t difficult to achieve.
For example, be sure to save a designated amount from each pay cheque as soon as you are paid, putting it toward your deposit. This forced saving will ensure that you save a consistent amount each time, leaving you with the rest of your pay cheque to live off. This will help to give you a rough estimate as to how long it will take for you to save your deposit, keeping your goal in sight.
Alternatively, if you work in a sales role, be sure to work hard to achieve commissions as regularly as possible. Most companies with sales roles offer employees a base salary plus commission. This is a perfect saving opportunity if you are able to live off your base salary. All you have to do is pretend you didn’t get paid that little bit extra and put it all toward savings!
Broaden your horizons
If time is of the essence, why not consider creating a second income for yourself? Almost everyone has the opportunity to create a second income – think about your skills, your interests and or even your hobbies. How could you utilise these to your benefit? When you work this out, you will be able to live off your primary income and then save all of you secondary income.
For example, perhaps you enjoy playing a musical instrument. Why not consider teaching that instrument to others? There is an abundance of opportunities available to you – you are only bound by your imagination!
Do you have a house full of things you don’t really need? Selling your possessions can be a quick, easy way to make some extra cash. Remember, one man’s trash is another man’s treasure!
eBay is a great place to start - offload your unwanted household items in return for some extra cash. You can sell anything on eBay so make sure you look through old CDs, DVDs and books as well as unused cosmetics, clothing and footwear. eBay can help you generate hundreds of dollars for you in a matter of weeks (if not thousands depending on how much stuff you have) and the best part is, you won’t even miss anything when it’s gone!
If eBay isn’t for you, why not go along to your local car boot sale and set up a stall there? You might not be able to fit everything you want to sell in your car boot but it will give you a chance to sell as much of your possessions as possible all in the one sitting.
Make the cut
We all have unnecessary expenses so it is wise to consider what you could cut out. For example, paying $60 a month for a gym membership isn’t always necessary when you can exercise at home or outside. Also, consider whether you really need that coffee on your way to work every morning, or could you just wait and make one once you have arrived? These small changes quickly add up and can make a significant difference on the time you spend saving. We recommend making a list of things you enjoy, but that you could find an alternative for and make the cut from there!
Most importantly remain patient and try to be flexible. Do your best to save your deposit but don’t be too disheartened if you think you have all your money saved, only to find out you haven’t quite got enough to buy your ideal property. House prices can change considerably in a short amount of time and they may continue to go up in the future.
To avoid disappointment, try to keep an eye on house prices in your desired area, and constantly review and alter your savings plan accordingly. You might have to make a few more cuts and save a greater amount monthly, or perhaps accept that it is going to take you longer to achieve your goal. If you get desperate, you can always compromise on the type of property you are saving for or the area you want to buy in.
Alternatively, there is always the chance that house prices will level out or even come down slightly. This could be setting you up to purchase a little earlier or even a better property than you thought!