Saving for a home deposit can be hard work. But having an organised and creative approach can make it simple. Below we offer some saving tips that go further than telling you to cut spending wherever possible.
1. Work Out How Much You Need to Save
Create a detailed budget that outlines your income, debts and expenses. Set realistic saving goals and ways you can achieve them. Figure out how much you need to save per week or month in order to have enough for a home deposit in 12 months time. Having an organised approach with clearly defined goals is motivating and makes saving easier.
2. Be Smart With Money
Reduce your living expenses in little ways. This goes beyond living on canned food and shopping at discount stores. If you like branded cheese, keep getting branded cheese. Cut grocery costs where you notice the difference as much, such as milk, sugar and dishwashing detergent.
Remember that emotions play a big role in saving money. If you’re miserable, you’ll be tempted to splurge. You’ll save better if you’re happy rather than denying yourself every luxury and forcing yourself to live just above the poverty line.
3. Save a Fraction of Your Income
Saving 10% of every paycheck is an old but great trick if you can stick with it. Put it in a designated savings account where it is harder to access right after you get paid. If you work in a sales role or a position where you can earn a commission, putting away that commission is a great way to save. Aim to live off your base salary and put any commissions into a savings account.
4. Spend Money on Non-Depreciating Assets
Avoid spending money on things where the value disappears or significantly depreciates. A game console you buy today will be worth a third of the price you paid in a couple of years. You can still invest in purchases that retain or even increase in value, for example art, designer clothes, furniture, antiques and memorabilia.
5. Sell The Car
A car is probably the biggest example of an expensive and depreciating asset. Selling it today and using public transport means you can avoid those expensive yearly costs and get extra money towards a deposit from the sale. If you absolutely need a car, consider downgrading to a cheaper, second hand car. You can always upgrade further down the track once you have your home.
6. Rent a Cheap House
If you’re renting a place for $600 a week, then moving to a place that costs $400 a week is a great way to save a lot of money. This simple lifestyle change can get you over $10,000 a year in savings. Another option is to move in with family or house share with friends to reduce costs.
7. Rent Out a Room
If moving isn’t an option, you could rent out a spare room in your house or even your garage. Depending on where you live, this could bring in around $50 to $200 a week.
8. Sell Unwanted Belongings
From unused clothes and jewelry to extra furniture and the second TV, you can make great progress towards your saving goals by getting rid of clutter. Sell your unwanted belongings on eBay, Gumtree, Facebook marketplace or have a garage sale. You never know what valuable gems you might possess that a budding antiquer might pay big for.
9. Create Additional Income
There are lots of ways to create a second income for yourself. Writers and graphic designers could do some freelance work on the side. An accountant could help people with their tax returns. Websites like OzLance and Upwork make it easy to find freelance work to do in your spare time.
10. Reduce Any Unnecessary Luxuries
As mentioned earlier, happiness is an important part of the saving process. You don’t need to remove every luxury from your life, but you should reduce costs where possible. Replace a tropical holiday with a camping trip. Visit the beach instead of an amusement park. Pack a lunch instead of going out to restaurants and cafes everyday.
The secret of Success just one-word” Focus and doggedly focus and this could be a set period until you have achieved your goal of owning a house of your own. Where this is done time for hot coffee and celebration until the time such just focus and get on with a qualified financial planner on your side to help you through.
Contact Mortgage Masters – Mortgage Brokers and Certified Financial Planner in Auckland
Mortgage Masters are your independent mortgage brokers in Auckland, servicing the community in home loans since 1998 to find our clients the best deal on the market. If you need tailored financial advice or helping finding the right home loan for your needs, please get in touch with our team today.