Buying a home is the great Australian dream. But how do you manage to save for a deposit in today’s economic climate? Most banks require a significant deposit and the reality is that the bigger your deposit, the smaller your debt. You will need to make a savings plan and stick to it. Saving requires discipline.
An important part of saving for a home is determining how much you will be spending on your property. Obviously the smaller the purchase price the smaller the deposit. New homes are surprisingly inexpensive. Check out Coral Homes Australia and see what you can get for your money. You might also visit property auctions in the areas you are interested in. Keeping any eye on the real estate’s classifieds is another good way of getting in touch with house prices.
Here are a few tips to help you save for a deposit.
What Can You Afford?
It is important to determine what you can afford, how much you can repay each week. Then, work backwards from there and work out how much you can afford to borrow. Too many Australians have over-committed to large mortgages and have been forced into a fire sale.
Make a Savings Plan
Savings do not happen without planning. Work out how much you need to save, say 20% of the total house price, and start saving.
Cut Spending
You will need to cut down spending that is not essential. Start by writing down what you spend your money on. Keep a record for a whole month. At the end of the month you can work out what is essential spending, like rent, food and electricity. You can also work out expenses you can avoid, tickets to the movies, eating out and buying the latest joggers.Remember to budget in a few treats; a budget that is too strict often results in an impulse blow out.
Moving Home
One of the biggest impediments to your saving for a deposit is that you have to pay rent. If you didn’t have to pay rent saving would be easy. Consider moving back into your family home. While this may not be all that appealing, it will help you reach your end goal of having your own home. Sometimes sacrifices are worth making. It will certainly speed up your savings plan.
Make Money from your Savings
As you save money you may wish to invest it to create even more money. Savings accounts generally produce very low returns. You might consider a term deposit or a special home saver account. If your plan is long term, like five years from now, then investing in shares is also an option well worth considering. Making your money work for you makes good financial sense; however don’t be tempted into get rich quick schemes as these are usually high risk.
Buying a home is one of the most important things you will ever do and the long term rewards will be incredible.
Image via coralhomes.com.au
very sound advise, it’s always important to just get what we really can afford, but sadly, not only in australia, but also here in US, a lot succumbed to the dreams perhaps built by marketers to have huge homes luring people to get into mortgage that would imprison them all their life to their loan.
I have been trying to cut spending here and there. MY goal this year includes saving money for future plans.
http://www.sailorsmusings.com
These are helpful tips not only in the purchase of ones dream home but also in handling our finances in general.
It really needs discipline to save. But if it’s for a dream home, all the sacrifice will be worth it!
These are helpful tips Sis Joy 🙂 Before we bought this house, we sold our old house first and used the money to buy this house and we owe half of the mortgage. My hubby has few years left for this house to pay off and I hope that his plan to retire in the Philippines will come true. I really want to own a house in the Philippines too with God’s plan 🙂
These tips are so useful especially those who want to have a new home in the future but I’m not thinking of having one yet as I’m still living with my parents and maybe if I have a stable job, I’ll have a new home on my own. 🙂
Buying a home is a dream for all of us. I agree with your tips. In my opinion just buy what you can afford.
This is nice. I am working on to have my own house and car for this year 2014.
I think it requires discipline and great deal of knowledge and control especially in managing money to attain the objectives.