Congratulations on making the decision to buy a home. It is an extremely exciting and momentous step. Now comes the hard part, knuckling down to save for your deposit. Let’s look at some essential tips to help you reach your house deposit goal faster.
How much do I need for a house deposit?
Before you even consider setting a goal to save for a house deposit, you need to know how much you will need to save. Generally, the minimum deposit required for a home loan is five percent, however, it is important to take into consideration additional costs such as legal fees and Lenders Mortgage Insurance. The more money you have to put towards your deposit, the better off you will be since you’re going to have to pay it all off anyway. However, the more money you can put down upfront, the less interest you’re going to have to pay over the long run.
Do up a budget to see where you can cut costs
Once you have set a goal for your house deposit, you can start working on a budget to help you achieve this goal.
But before you start trying to cut costs and implement an unrealistic savings plan, you have to have a clear understanding of your current financial situation and know how much you spend on a weekly or monthly basis. Having a budget can help you see where your money is going and where you can make minor adjustments to help reach your savings goals faster. To learn how to do a budget, visit the MoneySmart website and use their handy Budget Planner tool to create your budget.
Set a savings goal
Use the MoneySmart Savings Goal Calculator to set your savings goal. Setting a goal helps you to stay focused and know if you’re on track to your savings success.
Reduce your grocery, insurance, and utility bills
You can help to reduce your grocery bill by planning meals in advance and cooking in bulk and freezing meals. Use websites such as Taste for easy, affordable bulk recipes to stock your freezer.
You can also shop around and do online quotes to see if you can find more affordable insurance for your vehicle/s and contents etc. Finally, you can also shop around utility providers such as your energy provider and phone plan provider to find the best possible deals on each. You can use websites such as Finder to quickly compare providers.
Pay off some debt
If you can afford to do so, try and pay off any debts like credit cards or car loans as quickly as possible. Even if you can only afford an extra couple of dollars a week – the sooner you pay off debts, the more money you will likely save in interest. If you have a few debts, this alone can save you thousands throughout your loans.
If you feel like you’re struggling with debt or falling behind on repayments, visit the MoneySmart website for tips on how you can get your debt under control and take back control of your money.
Separate and automate your savings
It is vitally important that you keep your weekly expenses and savings money separate. It is extremely difficult to save money if you keep all your money in one account. If you don’t already have a separate saving account, speak to your bank about setting up a new saving account, preferably an account without a debit card linked to it. Once your savings account is active, set up a recurring direct debit from your main account to your new savings account to come out every time you get paid. This will mean that you don’t accidentally forget to transfer savings money some weeks and will allow you to see that you’re on track to reach your savings goal.
Round-up transactions
It is worth considering using an app like Raiz who offers round-ups. Round-ups allow you to round up from your daily purchases to the nearest dollar, then invest that money automatically into an account. You would be surprised how quickly your small change adds up, especially when it’s automatic and you don’t notice it.
Find quick wins
Look through your most recent bank statement to identify anything that isn’t necessary. Things like forgotten subscriptions and memberships. These monthly subscriptions tend to get forgotten and overlooked but most of the time isn’t necessary.
Utilise Government Grants and Stamp Duty Concessions
If you haven’t previously purchased a house, you may be eligible for the First Home Owner Grant (FHOG) as well as stamp duty concessions depending on which state you’re purchasing a house in. The grant amounts, as well as conditions, vary from state to state and change from time to time, so for up-to-date information on available grants and concessions, visit the First Home Owner Grant website.
Still Have Questions?
If you’re looking for the best finance options for your home loan and are ready to start the application process, speak to our friendly team today on 1800 538 287. They’ll be there for you every step of the way to answer all of your questions and help you find a flexible, affordable home loan to suit your needs.
Use Our Handy Home Loan Calculators to See How Much You Can Borrow
We have a suite of home loan calculators to help you get a better idea of how much you can borrow and what you can comfortably repay, simply choose from the options below.
