Why is saving for a home deposit so difficult?
The only thing standing between most first home-buyers and a house of their own is the home deposit. It is the most difficult and time consuming part of buying a new home. However, there are some things you can do to help you get your own place faster. Here are my tips to saving more money!
Seven (7) tips to saving money
Assess where you live
Take a look at your current living situation. Regardless of if you are renting or living with your family, there are several things that you can do to hold onto some extra cash each week.
If you're renting there are heaps of things that you can do to cut down on your spendings.
- Assess the size of home or apartment that you are renting. Is it possible to downsize and rent a smaller place? Could you look into finding a similar place that is cheaper than what you are paying now? Making a small change could save you extra money each week that could be going toward that home deposit.
- If you have extra rooms where you're renting, why not consider leasing the spare room? Having a roommate share the costs of the rent will have a huge impact on your savings and will get you into your new home faster.
LIVING WITH FAMILY
If you are or can live with family – great! This could take a huge amount of stress off of your savings. Now, I'm not saying that you can live for free if you're staying with family, but covering some groceries and the electricity or water bill could both save your family members extra cash and help you save for your new home too.
Cut out unnecessary items
RESTAURANTS AND FAST FOOD
Eating out of the house is fun but it could be costing you heaps of money! Let's say that you go out for dinner 2 nights a week and each time its costs you $50 – that's $100 a week extra that you are spending that you could be saving!
And what do you eat for lunch at work? Do you buy your lunch every day? And how many coffee's do you buy each week? If you buy your lunch every day ($20) and buy 2 coffee's a day (2 x $4.50) that works out to be $145 dollars a week… that's over $7,500 per year!
Discovering your inner chef could save you thousands! I guarantee that you could save heaps more money by simply preparing your lunches at home (or utilising the work kitchen facilities) and by eating in a little more.
WASH YOUR OWN CAR
Buying your own car is the second most expensive purchase that most people will make in their lifetime. Part of the joy of owning a car is keeping it looking as good as new… but how much is that costing you? Now I'm not saying that you shouldn't keep your car looking nice. It might be time to roll up your sleeves and give your car some TLC instead of paying someone else to do it for you.
How many entertainment subscriptions do you have right now? Netflix? Spotify? Apple Music? Foxtel? Stan? YouTube Red? Pandora? What about apps that are costing you money? How many of these do you actually use? If you have multiple subscriptions then you might need to look at cancelling them. If you don't use it then it is not worth the money! There are so many other things that you can do for free (Free TV, a book, free YouTube) and it will help you get into your new home faster.
If you have clothes in your wardrobe that still have tags or if you own so many clothes and shoes that you can't even fit them all if you wardrobe then this tip is for you! Sometimes you have to make sacrifices when you're saving for a home deposit and buying new clothes all the time is one of them.
Go through your clothes and shoes and re-discover what you already own.
If you drink quite a lot your weekly or monthly bill on alcohol can add up to quite substantial amount. I know that this is one that you don't want to hear but it's the truth. Set a limit for what you can spend on alcohol each week and stick to it… or even better cut it out and go on a detox. It'll improve your health and your home deposit at the same time.
Pay off your debts
Eliminating the interest that you are paying on credit cards will make a huge difference to your savings. Consolidate all of your debts into one place and make regular repayments. Not only will it help your credit rating but you will need to eliminate that debt before you get a mortgage anyway. Take advantage of balance transfers and interest free periods and look for accounts that have little or no fees. Get to know the accounts and cards that you have and get rid of the ones that are costing you extra money.
The most important thing you need to do to save money is knowing exactly what you incomings and outgoings are. There are so many templates available that can help you put together a simple budget. Knowing how much money you make and how much money you spend will give you the power to save more. It will help you see what you could potentially be saving, help you set goals, and help you identify any extra money that you are spending that could be going to the home deposit instead.
Bank accounts, credit cards, insurances… all of these things could be costing you unnecessary fees and premiums! Now, do not just think because you have the same account with the same insurance for five years that they are giving you a good deal.
- Take note of all of the fees that you banks and credit cards charge you and try to find different accounts that don't have those sorts of fees.
- When your car, contents, and health insurance come up for renewal, shop around and see if you can get a better deal.
There are so many comparison websites out there. There is absolutely no excuse for paying more than you should be.
Sell your stuff
I know I do and I believe everybody out there has so much stuff that do not need. Have you walked into wardrobe and thought “I've got a lot of stuff!” Have you even driven into your garage or maybe you cannot even drive into your garage because of that much stuff. You will be surprised what you might be able to sell. Facebook, Gumtree, Ebay… there are so many different ways that you can get rid of your extra stuff and make some extra cash.
Just simply say “No”. It's tempting to go out for a drink, a movie, dinner, the club, get your hair done, or your nails but all of these things are eating into that home deposit! Invite your friends over, have drinks at home, have a good old fashioned dinner party. Fun doesn't have to be expensive. All you have to do is find a cheaper alternative.