From a young age, many of us aspire to one day own our own home. It’s undoubtedly one of the most significant achievements in life, regardless of whether you intend to live there or use it as an investment property. However, like most achievements, purchasing a home requires a lot of effort, and in this case, saving.
In this article, we are going to talk about some of the best money-saving tips for your first house deposit. Sound interested? Then let’s get started!
Create a monthly budget
The very first step that every person should take before saving for a home is to create a monthly budget. By figuring out how much you earn and what your current commitments are, you will be able to determine how much you can actually put away and how fast you will be able to save.
Start by narrowing down your salary, as well as any expenses. This includes rent, utilities, groceries, and any other essential living costs. Then divide what is left between savings and spending. While some people are ok with putting away all of their leftover money, it’s still ok to splurge on non-essential items here and there! We are human, after all!
Do your research
Alongside creating your budget, it’s also a wise idea to do some research about the entire process. Try and think about all the hidden costs associated with buying a home. While you might be concerned about the deposit, you’ll also need to have savings for a full house inspection, stamp duty, and other fees.
The more research you do, the easier it will be, and the more money you can save. When in doubt, try and accumulate a few thousand more than your intended deposit. This way, you can cover any unexpected costs without falling into too much debt.
Choose an appropriate savings account
A good savings account is vital when you are starting to think about purchasing a home. However, you shouldn’t settle with just any old one. Different banks will have various benefits and interests, so try and do as much research into it as you can.
At the end of the day, you want to find something that has low fees and high rates. If you find that you are still struggling, you might consider talking with a financial advisor first. This way, you can get professional advice, including more ways to save.
Cut down your living costs
Depending on how much you are wanting to pay, cutting down your living costs can be a great way to put some extra money aside. Especially if you’re going to save up to renovate your home. While it might seem complicated, a lot of it is actually simple adjustments that you can easily make.
For example, try turning off the lights as much as possible and limiting shower time. You might also consider meal prepping and switching to more inexpensive entertainment options. Soon it will become second nature, and you will be amazed at how much extra you will be saving.
Become a bargain shopper
As mentioned above, it is still ok to splurge a little bit here and there on yourself. However, this doesn’t mean that you can’t become a bargain shopper to save extra. It can be very addicting!
Try keeping an eye out for sales, head to local markets where you can negotiate, and make yourself a list before heading to any stores. You might even think about going to some garage sales or second-hand stores! There are so many hidden gems waiting to be discovered.
Sell or get rid of unnecessary items/expenses
Over the years, there is no doubt that we can accumulate some unnecessary stuff. If you are looking for a quick way to make some cash, then you should definitely consider selling some items. You would be surprised at how simple things like books and movies can sell quickly. You’ll be saving money and making more space in your home at the same time!
On top of selling, you may also be able to get rid of other expenses you no longer use. It could be a subscription service or a membership. Try going through your budget and eliminating what you no longer need. It can certainly make a big difference.
Pay off your debt first
One of the biggest mistakes that many people make is trying to save while they already have existing debt. This will only cause you trouble further on down the track, and it may affect your credit score.
Pay off your debt first, and then start working towards your deposit. You will be more likely to get a loan and don’t have to worry about huge monthly payments after that. It might put you further back than expected, but it is essential.
Find alternative transport methods
Transport can quickly add up to be one of your most significant monthly expenses, so downsizing it can make a big difference to your overall savings. If you drive a car every day to work, that’s an extra $100 you could be putting away. Instead of using your vehicle, try and think about other methods such as walking, riding a bike, public transport, or car-pooling. Sometimes it might even be more entertaining anyway!
Pick up extra work
Lastly, if you have some spare time on your hands, you might consider picking up some extra work. This doesn’t have to be an entirely new job but could be small tasks to earn you some cash here and there. You might consider driving for Uber, becoming a freelancer, walking dogs, or house sitting. There are a variety of options out there; you just have to see what’s available.
And that’s it! These were some money-saving tips to help you accumulate your very first house deposit! It might seem challenging at first, but the more you follow these steps, the easier it will become. You have the potential to make some great savings while enjoying yourself at the same time! Think of how rewarding it will be when you have finally got enough!