5 tips that will help you save for your new home
It is a fact that house prices in Australia are far higher than they were for the generation entering the housing market a couple of decades ago. With this development, home ownership has become a harder goal to reach for many Aussies. Australians are spending up to 10 years saving for a deposit – that’s 10 years that they could be putting money towards mortgage repayments instead of rent! So, is there any way to skip the wait and get the deposit together quicker?
If your current lifestyle involves no saving and you’re used to the comforts of spending everything that comes in, it can be hard to change your habits. However, in the end it is just a change in behaviour and mindset that needs to be taken on board consistently. We’ve put together these 5 tips that will help you save more and wait less until you’re able to make the leap to homeownership.
1. Create a Savings Account
This is such a basic hack, but an important one. Did you know that 16% of Aussies try to save money on their everyday account? You know, the same account that all your spending goes out of? Yeah, that’ll be a hard one! Create a dedicated savings account and move a proportion of your salary to it as soon as you get paid – not at the end of the month. This way you won’t be able to spend any of your savings without purposefully moving it out of your savings account. Make sure to get a good interest rate on your savings account as well to make the most out of it.
2. Get a Spending Tracker App
Tracking your spending has never been easier! In the smartphone era, there is an app for everything. Where we used to have to save receipts and log our spending in a notebook or an Excel spreadsheet, a spending tracker app is an easy way to automate the process of keeping track of your money spending. See what most of your money goes to and think of ways to reduce that.
3. Change Small Spending Habits
A latte in the morning and take-out for dinner a few days a week might not seem like a lot, but it builds up surprisingly quick. Give up small spending habits like these to increase the amount that you can put aside each week and you’ll notice a massive difference in where you can get in a year or two. In the end, if you want a coffee on the road, a keep-cup taken from home works just as well for a caffeine kick!
4. Meal Plan
One area where savings can be significant over time is grocery shopping. Work lunches out build up a huge cost over a 5-day work week, so consider packing lunch. Create a budget for groceries, plan meals for an entire week and then go buy only what you need with the help of a shopping list. You’ll be surprised to see how much less you can spend on groceries this way!
5. Go with a Low Deposit Plan
If you’re already saving as much as you can but the 20% deposit still looms far away in the distance, you might want to consider a low deposit home loan plan. Low deposit home loans have become increasingly common in Australia, with even the government starting to offer this type of assistance for a limited amount of people. With these programs, home buyers can access a loan with a deposit of around 5%. If it’s important to you to get to your own home quicker, you might want to investigate these programs. They can especially benefit those who are currently paying high rent and are unable to save because of that.
The age old saying “every little bit helps” is true when it comes to saving up for a deposit. With these hacks, you should be able to decide on a sum that you can put aside each time you get paid. Set your goals for the next few years and use one of the many home loan deposit calculators available online to estimate how much you need to be putting aside to reach your goals. If you still find the wait way too long until you’ll ultimately have the 20% deposit together, we might be able to help.
buildtoday is a specialist building consultant that can help you get a loan for your new home. Even if you don’t have the full 20% deposit together, our low deposit program can help you fast track your way to home ownership. With as little as $5,000 in savings, we can help you get a home loan through our financial partners. Find out more here and take our pre-qualification questionnaire to see if you’re eligible.