How to save for a house deposit

Buying your first home is a big deal.  Unfortunately, it can also be complicated, tiring and lengthy. Here at First Choice Home Loans Qld, we don’t want that experience for you. We don’t want you to lose the enthusiasm and excitement that one of the biggest purchases of your life should bring.  So, to help you along your way, we’ve compiled our knowledge and tips into this handy, easy-to-read series. 

Part 1 – Saving for a deposit

 “The secret of getting ahead is getting started” ~ Mark Twain

We can’t deny it; saving is never an easy thing to do.  The good news is, once you make a start, you’re already on your way to eventually sleeping under your own roof. Having a goal, good discipline and a solid strategy will always get you there quicker so, here are a few of our pearls of wisdom to help you save for that all important deposit.

Put your goals in writing. To help realise that goal, do some research, make a budget, talk to our First Choice Home Loan Qld team and work out what your financial goal should be.  To make it even easier, get started using our Budget Planner. Once you know what you’re aiming for it will be much easier to plan and successfully save. 

Be smart with your money. Learn to understand the difference between need and want.  Maybe, don’t buy so many wants and stick more to the needs. If you don’t care about brands buy the cheaper version but, if buying a cheaper version makes you unhappy, go with the more expensive item otherwise it will just go to waste anyway. Emotions play a huge part in saving money and if going without certain things make you miserable, you’re more likely to binge spend.  But, if you’re happy with your new purchasing habits, then you will continue to save for that grand deposit.  Remember, it doesn’t end there… whatever you save from these new habits, make sure it goes into your savings, not your pocket. You may think it’s too small to matter but, it all adds up!

Make your savings work for you.  Making cutbacks on your lifestyle is one thing, but putting that money to good use is another.  Our best suggestion is to open an account at a different bank and restrict all access to it.  No internet banking, no cards attached to the account, for the sole purpose of depositing funds, not withdrawing them. 

Take it straight out of your pay. Remove the temptation to spend your savings by arranging a set amount to be taken out of your pay each time and put directly into that no access savings account. This is where the discipline comes into it – do it as soon as you get paid.  It’s much easier to sacrifice at the beginning and stretch what’s left rather than trying to keep some aside at the end.  It never happens, there’s never anything left. And, if you’re only going to try and keep some aside, why not just do it at the start?  We promise it will be so much less stressful this way.

Lower your rent. Perhaps not a traditional tip you would have expected from us and it may not be for everyone. Depending on your circumstances, it could be worth thinking carefully about the following options…  Consider moving into cheaper accommodation.  It may be smaller or not as nice but, it will only be temporary. Or, and yes, we left this one til last, you could move in with your parents or in-laws for a while.  For most of us, that would surely be all the motivation we needed to save super-fast.  Before you dismiss the above, do some sums and work out what that extra cash could mean to your bank account.

Sell some stuff.  This may not be about regular saving habits but, it will give you an injection of cash into that savings account.  Let’s face it; do you really need all that stuff in your life?  What would you prefer?  To rent and have lots of stuff or to own your own home and be surrounded by things that really matter to you?  One man’s junk is another man’s treasure.  Besides…once you’re in your own home, you can always buy again but this time, to match your new décor.

Make small sacrifices.  This might sound ho-hum and you’ve heard it all before but again, those little amounts all add up to one giant house deposit.  Especially, when coupled with any or all of the above.  And, when we say small, we mean small.  Buy your morning coffee twice a week instead of every day or pack your lunch for work instead of buying it. Making a conscious effort to track your expenses will enable you to see where your money’s going and allow you to cut back where you can.

If you’d like to learn more about how much you could borrow, what your repayments would look like or how much deposit you think you might need, use our calculators to get you started and talk to the experts.  Gail and her team of home loan specialists here at First Choice Home Loans Qld are ready to help.  Call them today on 4957 5244.

Next installment coming soon: Part 2 – Budgeting