Saving for a deposit for your first home can be a daunting task. The good news is once you have started saving you are on your way. You should try to save at least 10% of the property’s value as your deposit. It is a lot of money, but it can be done. When saving it is important to know what you are saving for. Have a clear goal in mind and keep you on track.
Here are a few tips to help get your savings started.
Pay off any debts, loans or credit cards you have. The money you are spending paying off any other loans or credit cards can now go towards saving. By paying off your debt you will also be saving as you won’t have to pay interest.
Open a rewards savers account that pays bonus interest to reward you for saving.
Direct debits can be a massive help. They automatically debit the money from one account and put it into your savings account before you can spend it. Even something as little as $25 a week can soon add up.
By creating a budget you can see where your money is going and identify areas if which you can save. Planning ahead with your finances for a full year can seem overwhelming, instead budget monthly or in accordance with the length of your pay period.
Identify your unnecessary costs which you can cut down or cut out. Cutting back on small things like take away on Friday and Saturday nights, daily coffees and buying lunch every day can lead to savings in the long run.
Do some research and get professional financial advice. Speak to a mortgage broker to find out your options when borrowing.
Don’t borrow more money than you can afford to pay back. If you get a smaller loan that means less interest you have to pay in the long run and cheaper repayments. Be aware of costs like conveyancing fees and stamp duty, this is where a mortgage expert can help out. Repay extra when you can and make your repayments on time to ensure you get a good credit rating. We would suggest setting up a direct debit for as little as $10 more per repayment towards your loan as this will soon add up. Don’t forget about the hidden costs like stamp duty, legal costs, insurance, building and pest inspections, utility connections, moving costs and council rates. It is important to remember these things and including them in your budget when saving.