Don’t buy any more smashed avo breakfasts, they say. Cancel your Spotify premium account, you hear them call. Sure, these are some ways you can save money for your deposit, but the fact of the matter is that buying your first home should not mean that you give up on the finer things in life. The question of how to save for your first home is one that generations of Australians have been asking – it’s the Aussie dream! But unlike generations gone by, rising living costs and the rising cost of land in Australia have meant that the Australian dream has become unattainable for anyone born before PAC-MAN was released… or is it?
This is our guide of how to save for your first home.
1) Stay at home
Going out with friends is one of the biggest expenses for people who are trying to save for a new home. As a rule, in the months leading up to saving for your first home, you should invite your friends over or go to someone’s house instead of going out. Playing some board games or just catching up over a home cooked meal is not only fantastic bonding time, it also means that you can save all of the money previously spent on overpriced cocktails and tapas.
2) Get tech savvy
There are a number of apps that can help you manage your money. Apps like Clarity Money will help you figure out where your money is actually going, so you can see where you can close some gaps of on your expenditure. You can even earn some extra money using apps like Acorn, which rounds up your purchases to the nearest dollar and invests the money in your Acorn account.
3) Get yourself a “side hustle”
If you need to give your bank account a little boost, it might be time to find something you can do on the side. There are thousands of people out there paying off credit card debt and saving for holidays by driving Uber so they can work around their work schedule. If you have a talent, sell it. It’s a gig economy, people.
4) Bring a packed lunch
The average young worker spends more than $100 per week on lunch when they are out and about working. The best way to reduce your spending is to bring a packed lunch four days per week (you need a day to splurge). Make sure that you make a delicious enjoyable lunch that you look forward to, and you will never need to spend another dollar on overpriced sandwiches ever again.
5) Pay off your credit card
This is a non-negotiable. If you are not smart with your credit cards, the fees you are regularly charged could be chewing up the potential for you to purchase a new home. Pay off your debt, and start with a clean slate.
6) Work on your tax return
Make sure you have an excellent receipt filing system so you can maximise your tax return every year! Getting an extra couple of hundred dollars when tax time comes around can ultimately help you crack the deposit number.
7) Slash and burn
Haven’t gone to the gym in 4 months? Cancel that membership. Go through all of your direct deposits from the bank and see which services you are no longer using. Be vigilant and be aware. Regularly checking your bank account can also help you pick up on any services that you are no longer using, but still paying for! This could add up to thousands of dollars per year.
8) Coin jars are so hot right now
Did you know that a 600mL Coke bottle full of $2 will equal $1000, give or take. Whether you like a novelty tin, or you’re happy with a clear jar, creating a dumping ground for all of those 20 cent coins saves them from the inevitable destiny they face of falling down the back of a couch.
Without thinking you will potentially be able to save thousands of dollars.
9) Invest like a pro
If you have a few years before you are in the market, try your hand at investing in different markets. Be aware though, that this is a risky path to take and you could end up losing money. But if not, you could end up saving your entire deposit. Seek professional advice on the best investment plan for your current situation.
10) The wait-a-minute rule
Whilst you are on the path to saving, enforce a rule on all purchases of a discretionary nature. For new clothes and shoes, wait 30 minutes before you actually purchase that item and for larger purchases, give it a few days. This will both avoid buyer’s remorse and overspending on unnecessary items.
For more information on what you will need to do buy your first home, speak to one of our consultants today. They will be able to walk you through the entire finance process.