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6 tips to saving for your home deposit in 2016

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6 tips to saving for your home deposit in 2016
Posted 09 February 2016

We are well into the new year... keep your resolution going and get ready to snap up the home you've been dreaming of!

If you're trying to save a house deposit and you're not making progress, you might need some help.

We can work together on a plan to get you there in 2016!

As a rule of thumb, lenders will require you to have a savings deposit of at least 5% of the purchase price of the property. But, if possible, it's fantastic to have a deposit of 20% or more so you can avoid expensive Lenders' Mortgage Insurance. Here are our 6 top tips to help you grow your savings account balance:

  1. Spend less than you earn: Sounds simple, right? But putting together a budget can really help you cut down - or hopefully eliminate - unnecessary spending. It's important to be realistic though, so allow for an occasional treat when you reach a savings target as it could be just what you need to keep you motivated. There are some great apps out there to help with this too.

  2. Save 10 per cent of each pay check: Yep, it's an oldie but a goodie, and no doubt one you've heard from your Mum and Dad. But it always works if you stick at it - you just need to pay yourself before anyone else. One of the best ways to do this is to open a designated savings account with a different bank to make it harder to access your money. Then just transfer 10 per cent of your net pay each pay period.

  3. Prepare your own meals: Making your lunch rather than buying it every day really will save you a packet. Try making a weekly trip to the supermarket - armed with a list of course as this will help you avoid buying unnecessary items. The savings will quickly add up.

  4. Eliminate the luxuries: We know, we know. This sounds mean. But eliminating or downgrading the luxuries in your life can be an extremely effective strategy for saving for a deposit. The good part is, you don't have to forgo everything at once - why don't you try eliminating one luxury per month, bank the savings, and then move to the next? You could:

    • Put your pay television or internet movie streaming subscription on hold for one month.
    • Rather than drive, take public transport or ride your bike to work for a month.
    • Cut back on takeaway coffee for a month.
    • Skip alcohol for one month.
    • Commit to not buying any new clothing for a month.
    • Invite friends around rather than going out for a month.
    • Pack your own lunch for work every day for a month.

  5. Get yourself a 'savings landlord': Ask your parents or partner's parents to oversee your savings plan. Ask them to check-in regularly to keep you motivated and on track.

  6. Pay off your debt: You'll save money this way by saving on interest repayments. It makes sense because it will increase the amount of money you can borrow, and free up your hard-earned cash to use towards mortgage repayments.

Don't just dream about buying a home any longer!

Take the time to set your financial goals, make a plan, and work steadily towards it.

Before you know it, you'll be looking for your Next Address!

 

 

Comments

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Suki
on 21st March, 2016
Such great tips - especially around preparing your own food and taking your own lunch to work, it's shocking how much you spend! In saving for our house, we also had a big blackboard that we coloured in each time we deposited money into the house savings account, it spurred us on seeing how far we'd come and how little we had to go to make our dream of owning our 'next address' come true! Thanks for the tips :-)
Next Address Admin
on 21st March, 2016
Thanks Suki Love the blackboard idea! Can we add that when we update this blog post?

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