Often the longest and biggest hurdle to overcome before being ready to search for that dream property is saving that deposit. While it does take time and some discipline, below we outline the 5 best tips we can offer.
- Set that goal or amount you are aiming for
This will help create the motivation you need and then you can get to work on saving.
Have a look at house prices in the area you are wishing to buy in and have a look at online borrowing power calculators.
A quick chat with your mortgage broker where they can also do some indicative calculations to show you what you may be able to borrow.
Remember it’s not always necessary to have a 20% deposit as this varies from lender to lender. - Get rid of debt
Get rid of debt such as credit card debt, personal loans, Afterpay or Zip. Focus on using any surplus money you have to pay these off as soon as possible. If you have multiple small debts that you are finding really hard to manage with multiple payment and direct debits you could consider rolling them into one loan to make them manageable. - Look for ways to cut back on discretionary spending
Have a look over bank and credit card statements over the last few months and see what things you can cut back on. You would be surprised how often people find things such as multiple gym memberships when doing this exercise. - Do you really need all the subscription services you have?
Also have a look at eating out habits and entertainment, yes of course its important to do the things we all enjoy but say cutting out one or two per month could make a huge difference and the money saved there could be the start of a regular saving plan. - Set up a high interest savings account
Look for a high interest savings account with low or no monthly fees.
If you can manage it set up automatic payments into this account so you don’t have to think about it as soon as you are paid and watch your balance grow! - Swap credit cards for debit cards
This is a step that some people find very helpful if they find it hard to stop using the credit card and see the limit on the card as available funds until the interest kicks in.
Many banks offer free debit cards linked to transaction accounts and this way only the money you have in the account can be used for purchases.
