In this era of this fast-tracked life, the cost of living is constantly rising and it is hard to save money. This makes it harder for a person to keep money aside for a home deposit. But if you have the right tools, you can definitely climb up the ladder and double your deposit in no time. All you need is a well-thought-out strategy that allows you to make more savings while reducing the time it takes to reach your goal.
It does seem impossible from the sound of it. First of all, the prices have dramatically increased in the housing market during the past few years. The number of buyers has also gone up, which makes it hard and financially challenging for home buyers.
However, what many people are not aware of is that there are only two ways to save a deposit fast, i.e., to spend less or save more money. Yes, it is as simple as saying it, but it needs creativity and discipline. Below are some of the tools you can use to begin your journey of getting a home.
This is one of the most effective tools to climb your way up to fulfilling your dream of buying a house. Budgeting allows you to discipline yourself in terms of spending money. In fact, it makes you aware of what your current spending habit is and how much you need to spend on a day to day basis.
Creating a budget does not take long. Many people tend to create a very complex and detailed budget. It is hard to maintain and update that budget on a regular basis. To keep the budgeting simple yet effective, you can use TSL system, i.e., Tax, Savings, and Life. Keep 30 percent of your income to paying taxes, 20 percent in savings, and spend the rest of your gross income on getting what you need or want. You can always build on it further and add more categories as you get the hang of it.
Whether it is your long-term debt or short-term debt, it is very important to manage it properly or else you will end up in a pile of excessive interest cost. There are so many people who do not pay credit payments at the end of the month. The cost may not be very high at first, but if you do not manage it from the beginning, you may find yourself trapped in a downward spiral of debt.
Cut down on expenses and keep a certain portion of your income aside to pay back your debt. The more you discipline yourself, the better it is for you in the long run.
Streamline Your Banking Habits
Do not put your money into just any bank account, put it into a high-interest savings account separate from your everyday account. Make automatic payments each week when you recieve your pay so that it sends the money directly to this account and you cannot touch it.
House Owner Grants
Being a first-time homeowner, you can also make use of the first home owner grant (FHOG). The amount was initially $7,000 (tax-free) but it varies from state to state and has increased in some places. Following are the requirements of the grant:
- You need to occupy the property as your main residence within a year of construction or settlement
- You can only use the grant if you are buying a house for the first time
- You need to be an Australian citizen
- You should be at least 16 years of age, and
- You have not received FHOG before.
Try to save a deposit of at least 20 percent of the purchase price as it will enable you to avoid paying lender’s mortgage insurance. Save as much as you can; even a small saving counts. The more you equip yourself with the right tools, the better your chances are to reach your financial targets.