Written by
17 April 2020
Saving for a deposit can be a long and daunting process, particularly if you are renting at the same time. However, with a little planning, budgeting and discipline, you can overcome any challenges and be on the way to owning your dream home in no time. Follow these 5 simple steps.
1. Seek advice from a finance professional
The best place to start is by speaking to a mortgage broker or your bank. The savings and loan process can be a complicated one so this will ensure you get the best advice and understand exactly what your borrowing capacity will be and what your savings goals should be.
2. Create a designated savings account
Opening a separate account specifically for your deposit will make it much easier to track your savings and it’s a great motivator to see the account balance growing each month. Shop around to find the best rate and preferably one with no or low fees.
3. Figure out a budget and stick to it
It’s important to sit down and work out a budget plan that is realistic. Understand when your pay comes in and when your regular bills come out, like utilities and rent. This will give you an idea of how much money you are left with – keep some for everyday spending and the rest transfer into the designated savings account each month.
4. Reduce your everyday spending
Do you actually use your gym membership? Why not bring your lunch from home rather than eating at your local café each day? Every little bit counts when you’re saving for a deposit so take a look at your regular expenditures and see if anything can be reduced or consolidated.
5. Be realistic with your savings goals
The road to having a full deposit in your account can be long and overwhelming. If you aren’t setting realistic targets you can end up taking longer to reach your end goal or not reaching it at all. Keep a healthy balance so you aren’t changing your lifestyle completely and set mini-goals along the way which will keep motivating you to continue.
For more information or if you have any questions about saving for a home deposit, don't hesitate to contact us.
