Saving for a deposit has become more important as the cost of housing has risen. Unfortunately, it has also become harder with the increasing cost of living expenses. Once your rent and utilities have been paid, food shopping bought, and cars filled with petrol, there isn’t usually much left over. This can be quite daunting for first home builders especially. Having said that, there are changes you can make to help you reach your savings goal.
Prepare a budget
It may be boring but it is definitely worth it to set aside a couple of hours and make a plan. One way to really see where your money is going is to record expenditure over a month, and be sure you jot down everything, no matter how big or small.
Cut out unnecessary spending
After a month of tracking your spending, it’s time to decide what you can cut back on, or even totally cut out. If you buy your lunch every day, you could commit to bringing it from home 3 times a week- a simple change that could save you over $2000 a year. Maybe you like to eat out at restaurants- even cutting out 1 restaurant meal a week can mean an extra $3000 a year towards a deposit. Don’t give up everything, you still want to live your life! Making multiple smaller changes instead of drastic ones that impact your current lifestyle is the better option.
Compare and save
Another way to slash your outgoings is to shop around. When food shopping or even making larger purchases, look for who is offering the best price or which store has a sale. Review all subscriptions, memberships and insurances that you pay. Most banks/insurance companies will offer reduced premiums if you have multiple policies with them.
Set up Automatic Transfer
Setting up a recurring automatic transfer is recommended. Having the amount of money you have decided to save come out of each pay automatically and crossed into a seperate account is a great idea. You are less likely to miss, or inadvertently spend it if it is not easily accessible.
Ditch other debts
Try to pay off other debts, such as credit cards and personal loans. Although it will slow your saving in the beginning, getting rid of these often high interest debts, will save you in the long run. It is also beneficial for increasing your borrowing power to have as little outgoings as possible.
Open a Term Deposit Account
Look into the best account to save your deposit in. Some people are reluctant to use a term deposit account as the funds are inaccessible for the nominated time, but the extra interest earned does make a difference, helping you reach your goal sooner.
Talk to your home builder
Home builders understand that it can be tough to save a large amount of money for a deposit. At Dreamstart, we offer low or no deposit finance, to help you get into your own home sooner. House and land packages are also something to think about. You can be in your own Dreamstart home for as little as $270 per week* ($261k package). Get in touch with the friendly team at Dreamstart Homes to discuss your options!
* Loan amounts are based on a Finance 365 Pty Ltd lender of Finsure Finance and Insurance Pty Ltd with interest rate of 3.88% and comparison rate of 3.98% and 52 weekly repayments over annual loan repayments, repayable over 30 years. Home loan is based off 95% of the package price, deposit required of 5% (excluding fees). Interest Rates as advertised are current of 25/02/2019 and subject to change based on lender discretion.
Disclaimer: The Comparison rate is calculated on the statutory assumption of a $150,000 loan over 25 years.
Warning: This comparison rate is true only for the example given and may not include all fees and charges. Different terms, fees or other loan amounts might result in a different comparison rate dependent on lender policy and time of application.
Finance 365 is an Authorized Credit Representative of Finsure Finance and Insurance Pty Ltd 2012 Australian Credit License 384704.