5 Top Tips For Saving Your Deposit
Whether you have definitively decided to take the leap into home ownership, or you want to be prepared for when you are ready, saving for your deposit is a positive first step that you can take today.
Typically you will need to have saved 10% - 20% of the purchase price, but don’t let the sizeable numbers overwhelm you from getting started. Having an achievable budgeting plan will help you see that amount in your savings account continue to grow.
Implementing a few lifestyle changes can help get you in the right mindset for savings mode, as well as remove the stress of reaching that end point by taking smaller steps in the right direction.
Here are our 5 top tips for saving your deposit:
1. Open a Deposit-Only Savings Account:
Creating an account strictly for your deposit makes it easier to see how much you’re actually saving each month. Take some time to research different savings accounts and find one that offers the best benefits for growing your money. By creating a budgeting plan, you will be able to determine how much you can afford to put into your savings account from each pay cheque. Set this up as a recurring deposit and soon enough you won’t even notice this coming out on pay day.
2. Perform a Financial Examination:
You’ve already created your budgeting sheet to determine how much to put aside each time you are paid, use this to figure out where you are spending money that you don’t need to. Try calling your bank to renegotiate a lower rate on your credit card. The same goes for any insurance, telephone, and internet costs. Take a look at your power bills: see if changing light bulbs, or installing more energy efficient heating options could assist. Make sure to be very honest with what you put down, review every item on your bank statement from last month. If you have a gym membership but have only been once, consider cancelling it in favour of a morning jog.
3. Pay Off Debt:
The less monthly expenses you have, the easier it will be to save for a deposit. Although this may take longer than you like, make it a priority to pay off high-interest credit cards, personal loans, and similar debts. Paying interest makes it more difficult to pull money away to your deposit-only savings account. This can also make you more appealing when it is time to talking mortgage pre-approvals with a bank or lender. If you already have debt then this can take away from the amount of money they are willing to lend you towards buying a property.
4. Meal Prep:
A key lifestyle factor that many of us face is spending money on eating out or the convience of takeaway meals. You may be surprised when reviewing your bank statement from last month how quickly each of those meals adds up towards a sizeable monthly sum. Instead, assemble a weekly food budget, and make all of your daily meals over the weekend. This will make it less tempting to grab a takeaway during your busy workweek. If friends are wanting to eat out, invite them over and theme the evening so everyone can bring an item to contribute. Your savings account will thank you in the long run.
5. Plan a Date Night:
Just because you’re focused on saving doesn’t mean you can’t have fun too! Saving is all about moderation, rather than spontaneous nights out designate one date night per month. You can pick a place that you and your partner both enjoy, and that is also modestly priced, or create the perfect romantic night in. Light some candles, cook your favourite dish and finish with a movie and popcorn. Saving towards a joint goal is far more satisfying than a round of Friday drinks or a fancy Saturday night dinner at the newest gaff in town.
Throughout the savings process, always keep in mind what the goal is that you’re saving for, buying your own home! The sense of achievement that you will feel when you see that amount growing in line with your goal will be well worth any sacrifices made along the way. Now, go grab a pen and paper, and get started on your monthly budget!