Property ownership, whether for home or investment, is an aspiration for many Australians, yet the prospect of saving enough for a deposit can put the dream off into the future.
Goal setting, clever planning and a commitment to following through are often the keys to solving this savings problem. It also helps to remember that creating a savings plan need not result in the stripping away all the good bits life has to offer; more likely, it will prioritise them…
Start the process by speaking with your accountant and perhaps a mortgage broker who has access to a wide range of lenders. This will give you a good idea of how much you can and need to save for your deposit, in order to buy within a particular price range.
Next, create a comprehensive budget, constantly reassess it, and follow it to the best of your ability. It can be as elaborate or as simple as you like however, even a basic Excel spreadsheet with costs detailed in consecutive columns. The easier it is to maintain, the more likely you are to keep it up.
Most importantly, be realistic about what you can achieve.
Once you know what you can afford to save, consider setting up automatic payments into a high interest savings account – then watch it grow.
When planning your budget, consider these tried and tested savings tips:
Give yourself a holiday every now and then, but reduce all costs where possible. Fly with a discount airline and/or wait for airfare sales. Alternatively, consider giving a cheap cabin, van or tent a go, and enjoy the adventure.
Take lunch to work rather than buying it. Same goes for coffee and tea - bite the bullet and make it at work. Every cent counts.
Don’t turf the old faithful. If you have an old car that isn't in the best aesthetic condition but runs well, resist the temptation to buy a new one. Which would you prefer: a vehicle upgrade or being months/years closer to owning your own home?
Don’t be a clothes fanatic or hoarder. Shop at funky seconds and samples shops, warehouse sales, factory outlets or even online. You could also consider selling old clothes (or other household items) online or at markets, to save extra money.
Keep up your social life. Keep the smile on your face but tone down your social agenda where possible, such as encouraging friends around to dinner or out for a picnic or barbeque instead of heading out on the town.