Saving up enough money for the deposit on your first home can be a daunting task. Some people have more experience saving than others, but chances are you probably havenâ€™t had to save this much money before in your life.
Here are some tips to help you get started on your journey successfully saving up enough for a deposit for your first home.
Planning is everything
A good plan can make or break your savings goals. Take the time to create a budget that you can stick to. Write out all your weekly expenses (like rent, food and entertainment), your monthly expenses (like internet and phone), and your less frequent expenses (like electricity bills). To make things easier to track, use a budgeting app or spreadsheet to get to know what you spend money on day-to-day.
Remember, you can't stick to a budget that's not realistic, so make sure you're honest with yourself when creating your budget. If you find it isn't working, that's ok! Simply go back and revise your budget, find out why you overspent, and factor that into a new goal.
Is there anything you can change about your spending?
Once you understand exactly what you're spending your money on, you can think about ways that you might be able to cut back. These days, many people move in with their parents to help them save up, but this isn't the only option. Maybe consider moving to a similar but slightly cheaper area to save on rent? Could you find a housemate for that spare room, or catch public transport more often? Review things you're regularly spending on that you don't need, like a subscription to a service that you never use.
Understand the process of buying a home
For your deposit, you'll need to have about 20% of the purchase price of the home saved. So if you're looking at a $400,000 apartment you'll need $80,000. You'll also need extra funds for additional costs, such as conveyancers and lawyers. As a first home buyer, you may be eligible for a first home buyer grant and stamp duty concession, which brings us to our next tip...
Financial planners are a must for getting all your finances in order before taking the leap into buying your first home. Ask for their advice and recommendations and make sure you take them on board. They can give you great tips about how to save money on taxes during the buying process, so they really are worth investing in.
In moments of weakness, remember why you want to buy
Saving can be hard! But as long as you plan properly, it's something that you can achieve. Whenever you're tempted to blow out your budget, take a deep breath and remember why it's important for you to own your own home.
Navigating through the dos and don'ts of buying your first home doesn't have to be an intimidating process. At Ann Paterson Real Estate, our experienced staff can guide first home buyers through this difficult journey and ensure that it becomes the joyful experience it should be.