Get into your first home quicker with these savings tips.
The golden rules to save for a house deposit fast is to eliminate outstanding debt and find hidden pockets of savings. Here are our top 8 tips for boosting your savings to help you dip your toe into the property market faster.
Tip #1: Purge your plastic
While credit cards are great for emergency purchases or shopping online, they can be problematic if used regularly. Generally, plastic cards have higher interest rates than personal loans, so it’s best to chop them up and pay off the outstanding balance as quickly as you can.
Tip #2: Become a bargain detective
We all love shiny new products and gadgets, but if you’re committed to saving for a home it’s not always necessary to be the first person on the block with the newest device. Try platforms such as Gumtree, eBay and Facebook Marketplace to find near-new second-hand goods. You can often buy goods at about 30%-60% less than what they would cost in a store. There might be the odd scratch here and there, but the savings make it worth it.
Tip #3: Save on rent
Rent can be one of your biggest outlays, so it’s worth asking yourself — would an extra 15-minute commute be bearable if it boosted your deposit savings? For example, if you’re currently paying $550 per week on rent and you found a place in a suburb that was about 20 minutes further out that cost $350, that $200 savings per week would work out at a whopping $9,600 per year.
Tip #4: Set goals and work on a budget
Having a plan prevents you from getting lost on your savings journey. Make regular monthly and quarterly goals you can work towards, but also add in some stretch goals. Don’t be disheartened if you don’t achieve certain milestones, make sure you re-strategise and keep going.
Tip #5: Weigh up the pros and cons of having a car
If you have a car and rarely use it, consider off-loading it. Once you work out how much repayments, registration, insurance, servicing, washing and other costs are, you might find you’re better off putting that money into your home deposit account.
Tip #6: Look outside the box for entertainment options
You don’t want to have to give up all those things you like doing in your social life to save money. So why not try marketplace platforms to get things done at a competitive price without compromising quality. Check out sites like Groupon and Scoopon for great offers on dining and health-related services, and Catch for major discounts on fashion, tech, and beauty.
Tip #7: Talk to your bank
Get in touch with your financial institution to see what options they have to help you bunker down on your savings. You can also chat to them about reducing rates and limits on any credit cards you may have.
Tip #8: Look into the First Home Super Saver scheme
The First Home Super Saver (FHSS) scheme enables you to save money for your first home inside your super fund. With the concessional tax treatments of superannuation, the scheme could help you save for a deposit faster. For first home buyers in a couple, this scheme can be very beneficial – a couple could save up to $60,000.
The common denominator here is persistence — it may take a bit of effort, but your savings account will thank you and you might be able to get into your own home sooner. Want to check out what’s out there in the home loan market so you can ready yourself? See how Joust can get you the most competitive rate here.