| Tips on Saving for a House Deposit
The Great Australian Dream! With increasing house prices and cost of living, you need a well thought-out deposit strategy.
In recent years, Australian house prices have increased dramatically. Obviously this also increases the size of the deposit that you need.
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At 20% deposit, a $500k house requires a deposit of 100k.
– If you qualify for the First Home Loan Deposit Scheme you may be able to purchase a home with as little as 5% deposit
There are two ways to save for your deposit.
1- Save More
2 – Spend Less
Both equally important, but easier said than done.
Assess your budget
Budgeting and controlling spending is about systems. Not fly by the seat of your pants. Without discipline there will be no success.
Do you really know exactly how much money you waste that adds no value? Think about it – Just One coffee a day @ $4 x365 = $1460.
– Just by cutting one coffee a day!
Start by Working out both your monthly income and expenses.
Include all your regular expenses and any debts you have (eg: credit cards, car loan, Afterpay etc). You will most like find you are able to cut out a few unnecessary expenses? Make sure your budget is achievable.
Get on top of your debts
Too much debt will break your budget – and make it extremely hard to achieve your saving goals.
Credit cards are the most common debt trap. You MUST cut down (or eliminate) your credit card purchases and resulting interest and debt. You simply can’t save effectively if you are paying off large debts.
Look at consolidating your outstanding debts into a low interest loan and then only keep one credit card with a small limit for emergencies.
Cut down on unnecessary spending and debts – You will save a fortune in interest and your bank will look more favourably on you when it is time to apply for a home loan.
If you’re saving for your first home, research the first home buyers schemes available to you.
Talk to you bank about different accounts and the ways that they can help you. They will be able to maximise your interest earnings and reduce your temptation to spend.
Make sure you have a demonstrated savings history Lenders will not approve you if you cannot show you are responsible with your finances.