Saving for your first home
The idea of owning your own home can be a very exciting prospect, however actually saving for the deposit can prove daunting for many first homebuyers.
The first homebuyers grant will help get you started, however most mortgage experts recommend you save at least 5% – 10% of the property’s value as a deposit. We understand the first home ownership journey and, in partnership with The Loan Company*, have come up with our top 5 tips to help kick-start your savings and get you into your new home sooner.
- Set up a budget – Set up a monthly budget so you can see exactly what you are spending your money on. This will help you identify where you could be saving money, how much you could be saving and will also help keep you on track with your saving goals.
- Clear your credit card debt – Whilst clearing your debts won’t help you save initially, in the long run it will be beneficial for three reasons. Firstly, you will start saving money on unnecessary interest repayments. Secondly you will learn to start living within your means, which will help with your budgeting and saving. And finally, it will open up your borrowing capacity, helping you get into your first home sooner!
- Set up a savings account – Setting up an automatic savings plan into a dedicated account can help achieve your savings goals. A good tip is to set it up so a nominated amount from your pay cheque goes directly into your savings account. Chances are if you don’t see the money, you won’t miss it.
- Sell stuff on gumtree / ebay – These days there are plenty of online sites that can help turn your unwanted household items into much needed cash. From clothes to furniture, left over landscaping material to excess paint supplies, websites such as Gumtree and eBay are the ideal place to convert your clutter into cash, kick starting the journey to owning your first home.
- Eliminate the luxuries – Your budget will help you understand where you spend you money. This will assist you in identifying those regular little luxuries you could be cutting back on to help you achieve your savings goals. To ensure you are creating a plan you can stick to means you need still need to be happy with your lifestyle, therefore eliminating luxuries all together is not ideal. For example, start by eliminating buying lunch at work in your first month of savings, then move onto putting your pay TV subscription on hold the next month and so on. Saving money doesn’t mean to have to eliminate spending money on everything that makes your lifestyle enjoyable!
Before you take the plunge, do some research and get yourself some professional legal and financial advice. Mortgage brokers can be a huge help in laying out your options and getting you focused.
*Harrisdale Pty Ltd trading as The Loan Company Australian Credit Licence Number 386355