The unfortunate truth is that many Australians won’t be able to achieve the coveted Australian dream, the dream of owning their home. While some of us may have enough income to pay a mortgage, we simply don’t have the ability to save a deposit.
For many people, saving the deposit can take years. However, with some financial discipline, you can work towards building up for your home loan deposit in just a year – make that this 2017. If you want to obtain Brisbane house and land packages or other properties that you only see in magazines and the internet, commit to making this year the YEAR!
Here are uncomplicated tips to save money for your deposit.
Saving while renting. This may seem difficult, even impossible from the outset. Obviously, you have groceries, entertainment, and all other ongoing expenses of everyday life that take a huge chunk of your salary. If you rent in a capital city like Sydney, the rent you’ll pay will be astronomical. What you can do is to either stay with your parents temporarily (if that’s an option) or get a roommate to split the bill for bigger apartments.
Start by opening a savings account. Open a savings account online or at the same bank or credit union where you currently do your checking. You should choose just one institution for convenience. Most banks and credit card unions also let you transfer funds back and forth from accounts instantaneously or electronically.
Create a sensible budget. There are all sorts of budgeting, but not all of them are sensible. The quickest way to create a budget is by using a spreadsheet. Write down your monthly gross income and then subtract taxes and other costs from your pay. This will show you your net income. Next, show what you’re paying for other monthly costs such as rent, food, credit bills, the internet, water, electricity, etc.
With the money left each month, think about how you spend it. Keep receipts for things such as utilities, gasoline, entertainment, restaurants, parking – basically everything you spend money on. Now what you need to do is to cut costs – sacrificing cinema to just TV nights, restaurants to homemade food, half-night of air-conditioning, etc. You’ll be surprised how much you’ll save.
Check interest rates. Interest rates normally differ from such things as a savings account, credit cards, car loans, and other accounts. Go through every bill and account, check the interest rates and ask yourself if you can do better. For example, if you’ve been making prompt and full credit card payments, call the credit company and ask for a lower rate. Some banks allow this.
Check your credit score. Your ability to borrow as well as the rate you pay are dependent on your credit score, which is based on your credit reports, how much you borrowed, your total debt, any late or missed payments, and how much you can borrow from existing accounts.
Getting help from the government
If you’re in Australia, the government can help you save deposit if you’re a first home buyer. The government will contribute additional money on top of the money you save when you first open a home saver account, so make sure to use that to your advantage.
With the above tips, Sydney, Perth, or Brisbane house and land packages – your very own quest for the Australian dream is not so far off. Start now and stay committed. Best of luck!