As mortgage brokers serving the Kwinana, Baldivis and Rockingham areas, we have processed a lot of home loans for first home buyers. That means we have seen a lot of financial information and helped a lot of first home buyers develop strategies to save money for their deposits. When people don’t have their deposit yet, one of the things we recommend is to try a spending freeze.
What is a Spending Freeze?
A spending freeze is just what it sounds like; you stop spending money for a period of time. We realise that you have to spend money on your monthly obligations such as rent, electricity, water and the like, but you can try to spend as little money as possible. We recommend trying a two week spending freeze first. You will learn some valuable lessons about your spending habits. You also may decide to keep spending as little as possible until you have enough for a deposit on your own home.
Decide What You are Going to Do with Your Savings
Unless you have a more important short-term goal, we recommend putting it in a fund for your first home deposit. But your first spending freeze can be an “experiment” of sorts if you like and you can spend it on something else. At any rate, a goal provides motivation to see the freeze through.
Check Your Pantry and Freezer
You may have a lot of meals hidden away in your pantry and freezer. During a freeze, use food you have been storing as much as possible. This will allow you to lower your grocery bill.
A spending freeze not only helps you start saving, but it also teaches you a lot about discipline and about your budget. You will also be more able to discern what is really important to spend your money on.
Call Smartline Rockingham to learn more: (08) 9527 1800.