If you are buying a house or apartment for the first time, there are a number of things you need to keep in mind. So we’ve compiled a savings strategy for first home buyers, so that you can reach your goals, faster.
Create a Budget
It is not easy to create a budget and stick to it, but budgeting allows you to exercise control over your money and spend it wisely. Set a budget and track your daily expenses. Whether your goal is to buy a house or go on a holiday, this will allow you to stay on top of your spending habits. A main benefit of having a budget is that it enables you to save for what you need, instead of what you want. It also reduces your financial burden as you develop conscious spending habits.
Spread Your Savings
It is important to spread your savings into different accounts and have an untouchable account. For example, you can save for different goals, whether it’s buying a car or planning a holiday with your family. Even if you save a small amount like $200 each month, you will end up having $2,400 in each account within twelve months, so be patient and focus on the end goal.
Keep Affordability in Mind
Buying a house is an emotional decision. However, it can turn out to be a very expensive decision if you don’t do your research. When you are buying a house for the first time, keep your budget in mind. Look at your ideal suburb, along with suburbs surrounding, because in some cases just one suburb over can be the difference between affordable and unaffordable areas. Be flexible while choosing a property and location and keep in mind the important of locality to amenities such as public transport and supermarkets.
Often reaching your goals takes more than just one year of saving; so set milestones when it comes to saving to reach your ultimate goal. Whether that’s buying a house or saving for something else, devise a plan and stick to it while understanding that it may take more than a year to get there.
No achievement should go unnoticed. Everyone should reward themselves whenever they reach a milestone. For example, if you have set a milestone to save $10,000 within six months, reward yourself when you achieve that target. This will encourage you to keep saving and reach your goal. Keep in mind, however, that the reward should not be costly.
Don’t Waste Money
Those who save money, spend their money very carefully. Small changes can have a big impact on your overall spending habits; park your vehicles in cheapest parking space, or cut out your daily coffee run. It’s important to remember that just because you can afford to buy something, does not mean you should. Stay focused on your goal and motivate yourself with milestones.
Seek Help from Friends and Family
As a first home buyer, if you want to buy soon rather than later, your parents can act as a guarantor for your home loan. Beware however that different lenders have rules for such arrangements.
No matter what you do in life, they key is to have patience and watch the market carefully. Depending on the time of year, this will make a huge difference towards what’s going on in the property market. Often, in January, the market is in high demand and only a limited number of properties are available. But the market comes back to normal gradually as the year goes by.
Develop Good Habits Early
This is yet another golden rule when it comes to saving for a new house. You must start saving money as early as possible. The sooner you start, the higher are the chances that you will be in a better position in the future. Set realistic targets and save accordingly. Keep in mind your goal deposit you need to reach, in addition to other charges, such as stamp duty, legal fees, etc.
Last but not the least, work hard to achieve your goals. If you think you need to make more money, find a second job on a temporary basis. This will allow you to make money faster and enable you to buy a house sooner than later.
Chat to Hunter Galloway about our saving strategies for first home buyers now, call us on 1300 088 065 or email Nathan at Nathan.Vecchio@HunterGalloway.com.au