9 Simple Ways to Save a House Deposit
Buying Your First Home? Here’s 9 Simple Ways to Save a House Deposit.
If you've ever dreamt of turning the key in the door of a home that belongs to you, then you already know that, for most of us, it will likely involve some serious financial planning.
In particular, it requires saving for that all-important deposit.
But while the thought might be daunting, with a little patience and determination, it can be done.
Here we’ve put together nine practical tips to help kickstart your journey towards homeownership.
Shoot for success : Set a clear, specific savings goal.
Before you embark on any savings journey, it's vital to know your destination.
And in this case, your destination is the deposit for your first home.
A typical down payment is usually between 10% to 20% of the property's price, depending on several factors.
While this number might seem large at first glance, it pays to remember that every expedition begins with a single step.
By setting a clear, specific savings goal, you establish a concrete target that will guide your actions and decisions along the way, and provide a sense of purpose, helping you stay motivated and on track.
Map your finances : The power of budgeting.
One of the most critical tools to help you reach your savings goal is an effective budget.
A budget is essentially a map that reveals your financial landscape – your income, your fixed expenses (rent, bills, car payments) and discretionary spending (dinners out, subscriptions, hobbies).
Understanding where your money is going each month is the first step in controlling and manipulating your spending in favour of saving.
It's crucial to be realistic and thorough in your budgeting process, making sure to capture every dollar spent - even on those small, seemingly insignificant purchases that can add up over time and impact your saving potential.
Simplify your strategy : Automated savings & separate accounts.
In our digital age, we have the convenience of automating various aspects of our lives, including our savings.
Setting up automated transfers to a separate savings account for your home deposit can significantly reduce the temptation to spend that money on other things.
Remember the adage "out of sight, out of mind"? That's the principle at work here.
By scheduling a portion of your income to be automatically transferred into a ‘house savings’ account, you're less likely to miss, or even notice, that money in your day-to-day account.
Clear the path : Prioritise debt reduction.
Debt can be a significant roadblock on your home-ownership journey. High-interest debts, in particular - like those on credit cards, high interest personal loans or payday loans - can slow down your saving speed.
By prioritising the reduction of such debts, you'll free up more of your income to be directed into your house savings.
It's like clearing a path; the less money you're spending on interest, the smoother and faster your journey towards your savings goal will be.
A temporary lifestyle shift : Live below your means
While the idea of living below your means may initially seem difficult, remember that it's a temporary change for a lifetime of benefits.
It doesn't require drastic measures; instead, it's about making informed decisions to spend less than you earn.
Review your current expenses, get clear on wants vs. needs, and identify areas where you can reasonably cut back.
These might include eating out less often, reducing subscription services or finding less expensive hobbies.
Remember, you're not aiming to live uncomfortably, just to spend mindfully, focusing on your long-term goal of home ownership.
Leverage life's surprises : Make the most of windfalls.
Life often presents us with unexpected financial boosts - a tax return, a pay rise or a generous gift.
If you’re lucky enough to be the beneficiary of one, these windfalls, large or small, can be powerful tools in your savings strategy.
By directing these unexpected sums straight into your house savings, you're leveraging these opportunities to move significantly closer to your savings goal.
Accept assistance : Explore first homebuyer programs.
As a first-time homebuyer, you may not realize that there are numerous programs designed to help you. These initiatives, often backed by governments, can assist with down payments and closing costs. It's like having an ally in your journey to homeownership.
By investigating what's available in your state, you could potentially shave off a significant amount from your savings goal.
These programs may come in different forms like grants, low-interest loan programs or tax credits, all designed to ease the path to homeownership for first-timers like you.
Three that are working to help aspiring homeowners in South Australia today are :
· First Home Buyer Stamp Duty Relief
If you’re unsure what might be available, or even what might apply to you and your circumstance? Get in touch with a reputable financial planner or mortgage broker who can help.
Some of our favourites are :
Ramp up your income : Unlock your earning potential.
While saving for a deposit often focuses on cutting expenses, increasing your income wherever possible can be just as - if not more - effective, and significantly speed up progress towards your goal.
So consider your skills and find ways to monetise them.
One of the best places to start? Your current job.
Is there any scope to take on some overtime, or an opportunity for a promotion or raise? Does your employer offer bonuses for achieving certain goals or referrals?
While these often demand a little extra time and effort, think of them as investments toward achieving your goal of owning your own home.
If your current employer is unable to offer any of these things, the next best is to consider a second, part time job. And it doesn't necessarily have to be in your field of expertise!
It could be anything that suits your skills, interests or schedule. For example, you could take on weekend work at your local coffee shop, start a dog-walking service or even teach an art class!
In the same vein, freelancing is another excellent way to boost to your income.
Websites like Upwork and Fiverr provide a platform where you can offer your untapped skills - whether they be in graphic design, content writing, programming, admin support or a variety of other areas - to a global market.
The biggest bonus? Freelancing can often be done remotely and in your own time, offering a flexible way to earn extra income.
And finally, if another job isn’t feasible, something as simple as selling things you don’t need can often generate a significant sum towards your deposit.
Look around your home - got any unused electronics, furniture or other items gathering dust in your garage? Online marketplaces like Facebook or eBay could be perfect platforms to turn your unused clutter into cash.
Increasing your income not only speeds up your savings journey, but could help enhance your skills, open up new career opportunities and improve your long-term financial health!
All it takes is a little creativity, initiative and willingness to step outside your comfort zone.
Stay on track : Patience pays off.
Saving for a deposit is not a sprint; it's more a marathon that requires consistent effort, focus, and above all, patience.
However, the reward – owning your first home – is worth every bit of effort.
Maintain focus by keeping your goal in sight.
Consider visual aids like a savings progress chart or a mood board that includes inspirational images of your dream home, the suburb you want to buy in or the lifestyle you hope to have once you’ve achieved your goal.
These can provide a daily reminder of why you're making these temporary sacrifices, and help you stay motivated - especially on days when saving seems particularly tough!
It’s also motivating to monitor your progress. Marking off milestones or keeping a running tally helps you see how well you’re doing, provides a tangible sense of achievement and reinforces your commitment.
But keep in mind - some months you’ll be able to save more than others. And that's okay.
Every little bit - every step forward, no matter how small, brings you closer to holding the keys to your own home.
Steadiness, consistency and patience always pay off.
Saving for your first home might be a tough - and at times frustrating - journey filled with ups and downs… personal growth, strategic choices and moments of sacrifice.
And while it might be a longer road than you'd like, it's a trek worth taking, because it's all leading to that incredible day when you turn the key in the door of your very own home.
Using these practical tips will set you on the right path, but remember - you don't need to do it alone.
Enlist the help of a reputable financial planner, mortgage broker or real estate agent, each of whom can provide valuable guidance and support, and ensure you stay on track to realise your home ownership dream!
-------
As property experts with over 21+ years combined experience in buying, selling and managing property in Adelaide, We Connect Property are ready and waiting to offer expert guidance and support when you need it most, and answer all your questions about selling your property.
Check out our 5 star Google reviews or Rate My Agent testimonials here to find out what our happy clients think!
And if you’re just getting started, or looking for valuable property buying, selling or investing tips?
Check out these other handy articles on our blog:
· How do you know it’s the ‘right time’ to buy a new home?
· The Ultimate First Home Buyer Checklist
· Can I Sell My Existing Home While Buying Another?
Give us a call on 0403 799 983 today, or drop a line to sales@weconnectproperty.com.au - we can’t wait to chat!
To stay connected with everything real estate, follow us! Facebook | Instagram | TikTok | LinkedIn | YouTube
Or connect with us today for more information : Connect Now
We Connect Property - your Adelaide real estate & property management specialists.
DISCLAIMER: All recommendations made by We Connect Property are general in nature and not to be relied upon as legal or financial advice. To ensure accuracy, we always strongly recommend seeking independent, professional advice tailored to your specific situation before making any investment or financial decisions.