5 Saving Hacks to Achieve Your Deposit Goal
When you finally decide you’re ready to take the plunge into owning property, the next thing you need to think about is how to save for a deposit. It’s inevitable that the whole concept of saving so much money will seem daunting at first, maybe even impossible. However, with a solid savings plan you will be on your way to property ownership in no time! It’s all about being realistic, determined and having a little bit of willpower.
Here are 5 ways you can get started:
- Set a target.
If you are a good saver, then setting yourself a target of a 10-20% deposit is a good place to start. Be sure to look up the median price of the type of property you would like to purchase, and then calculate your desired deposit. For example, the median 2 bedroom price for a unit in Cockburn Central is $411,500. Saving 10% of this purchase price works out at $41,150. If you want to save this amount over 5 years, you will need to put aside around $690 per month.
Having an end date of when you plan on having the deposit in the bank is very important. Giving yourself and perhaps the person you are hoping to buy with a constant reminder of when you want the deposit by will help you both stay positive about the situation and give you a steady timeline.
If you get close to when you’re supposed to have the deposit ready by and don’t, try to avoid pushing the date back further and instead think of alternative ways to save. Is there a way you can make up the difference between what you’ve saved and what you need?
2. Make a realistic budget.
Declaring that you’re only going to spend $50 a week for the next year to save up for your deposit isn’t the most realistic way to go about things.
Some weeks you may only spend $50, but other weeks could be more like $300, so coming up with something that is manageable is the first step. If you are struggling with the thought of even having to set yourself a budget then automating your finances so that a portion of your income goes directly to a savings account is a good option.
3. Get rid of everything you don’t need.
This means everything. From your weekly subscription to your favourite magazine, subscription TV services, and potentially even renegotiating your rent are just a few ways to save some extra cash.
If you are fortunate enough to have parents or family that are willing to house you for a few months (or a year) to save on rent and utilities, then that is a huge win in achieving your goals. You could always offer to pay a small portion of their rent and they could hold that for you so that once your rental time with them is up, you have a good portion of your deposit ready to go.
4. Look around – savings are everywhere!
Do you enjoy the finer things in life? Then this one is going to be hard for you but definitely necessary. When working on your budget, take note of how much you spend daily, not on things like rent and petrol but the smaller things.
Lunch at a café could cost you $25 whereas you could instead save that money and make a lunch with the groceries you already have in your kitchen. Do you enjoy going for cocktails with your friends every weekend? Perhaps opting for a low key dinner at home might be better. It might seem tedious and a little boring, but it will save you a lot of cash in the long run and get you into your first home sooner!
5. Stick to it.
Keep in mind that the savings phase will pass and eventually all your hard work and dedication will pay off so try your very best to stay positive. Once in awhile give yourself a break and buy that magazine you’ve been eyeing off or splurge a little on a nice dinner but don’t let it become an everyday (or every week) habit.
Everyone struggles in their own way when it comes to savings but, throughout this whole process remember to keep your end goal in mind and the little sacrifices you make now won’t seem so painful when you’ve moved into a new home! Happy saving!