Are you wanting to buy your first home but need some help?
If you’re a young person living in this modern consumerist world, you may be finding it an impossible challenge to break into the booming Australian property market. Many of our young accountants share this challenge and here are some tips on saving to help you make your city apartment or suburban home a reality.
1. Start saving!
Opening a savings account will be one of the first commitments you make along the road to purchasing your first home.
- Look to professional brokers to research which financial institutions provide the best rate for your needs.
- Try to avoid online banking where you can transfer between accounts easily. Instead, set up an in branch account that requires physical signing for withdrawals to reduce the ease of withdrawing unnecessary cash.
2. Set a realistic target
To identify the level of savings you’ll require for your first deposit, research current properties that have been sold in the area you are aiming to buy.
- Attend weekly auctions or do a tour of the neighbourhood to see current price ranges for houses on the market.
- Seek advice on how much deposit will be needed with or without lender mortgage insurance.
3. Think small
We are continually told to stretch our imagination and think BIG, however focusing on smaller milestones and goals will result in repeated bursts of achievement.
- Break down your deposit goal into baby milestones of lower amounts for monthly or weekly targets.
- Create a reward system for the larger milestones, this could be as simple as treating yourself to your favourite dinner or bottle of champagne so you can look forward to each reward along the way.
4. Review current debt
The majority of us young professionals have some sort of debt to their name. Whether it is a car loan, personal loan for travel, credit card, or HECs.
- Consider that this may impact the level of debt a bank is willing to lend you.
- Try to eliminate or reduce any debt that is feasible, and aim to repay the debt with the highest interest rate first.
5. Reduce spending
I am sure we have all heard the saying ‘It’s not how much you earn, it’s how much you save’ and that requires controlling spending wherever possible.
- Review current spending for a week or month and consider eliminating the non-essential expenses. Often Netflix, coffee, work lunches/breakfasts’ and gym memberships are at the forefront of these expenses.
- Pick and choose to cut back on some of these and reduce the Direct Debits from your account.
6. Review current living arrangements
Although the freedom of living independently is something we all enjoy, there’s no place like home, especially for saving money.
- Consider moving back in with your parents or into a shared house. This will reduce the majority of your bulk bills such as electricity, water, food, internet and rent.
7. Swap dinner dates for coffee catch ups
It is important to remain social and have catch-ups with friends, but cutting out that expensive weekly dinner will add up.
- Try to swap expensive dinners for coffee and cake. Keep in mind special deals for movies, Groupons and other coupons to use with your friends.
8. Have a buddy
Support is one of the things you can’t put a price on or budget for. It helps to have all the people in your life on board with your goal.
- Communicate to a friend or a family member your current plans and goals. Sharing your successes and challenges with them will help to keep you motivated.
Good luck with your savings plan! If you’d like to discuss buying your first home, you can book an appointment with our Lending Specialists, Jayden Chen or contact us today on (03) 9835 8200.