Saving for a deposit is one of the biggest hurdles to overcome when beginning your property journey. If you are renting, paying bills and trying to save for a deposit all at the same time, it can be very overwhelming.
Here are five easy tips to help you save your deposit as quickly as possible.
1. Get professional advice
Typically, a home deposit will range from five to 20 per cent of the property’s value. This all depends on your income, credit score, budget and if you’re getting your parents to go guarantor. Either way, seeking the advice of mortgage broker or speaking with your bank can be very helpful when creating a savings plan.
Kym and Shane and the team at Acton Victoria Park are happy to take the time to discuss your needs and to determine if your expectations are realistic in the current market.
2. Create a separate account specifically for savings
Once you do all the critical research you should have a rough idea of the deposit size you need. If you open a savings account specifically for a down payment, this will make it easier to track your savings and will help deter you away from withdrawing money from the account.
Look at your options and try open an account with a high interest rate and low fees.
3. Work out a budget
It’s always important to follow a plan or savings strategy to keep you on track.
Make time to sit down once a week or a couple of days before your next payment cycle, and thoroughly go through your bank transactions. Write down the date your bills come out so you know how much and when money will be withdrawn and you can figure out how much is left over for saving and spending.
Check your account balance every day and ensure you adapt your budget for unexpected costs (ie car rego, dental, health, etc).
4. Cut your daily spending
If you are prepared to sacrifice spending for saving, you will be surprised at the extra funds you will accrue over time. Even the small things like buying a coffee, going out for dinner and purchasing unnecessary snacks can add up to hundreds of dollars throughout the month.
Also, try cutting down on your usage of utilities at home like water and electricity, and you can also even minimise your rent by finding another house mate or moving to a cheaper area.
5. Set realistic goals
While saving for a deposit can feel like a long, intimidating process, it is important to keep everything into perspective. Don’t create unreachable goals that are inevitably going to set you up for failure.
Even though your priority has shifted to saving for a deposit, be sure to maintain some balance in your life. If you are too frugal and completely eliminate all social events and lifestyle habits, you’ll likely end up feeling too stressed to follow through to the end. Set smaller interim goals along the way, have a date and saving target that you can tick off as you go. Once you see you are achieving your goal, while still being able to enjoy your life, you will only feel more motivated to continue.