Saving up for a deposit on a property is one of the hardest things many of us will ever do. It takes an enormous amount of discipline and patience to build up enough money to meet the requirements of your home loan provider, but it's all worth it in the long run when you finally secure your dream home.
Part of the challenge of saving for a property deposit is knowing where to start, and how to reach your target as quickly as possible. In this article, we'll take a closer look at nine of the most important steps to follow during the process.
1. Set a goal
Before you start saving loose change or taking on extra work, you'll first need to set a goal. Once you have a specific target in mind, it'll be that much easier to track your progress and see how far away you are. One way to start is by looking at properties in your preferred suburbs and find out what the average sale price is. From there, it's easy to work out how much cash you'll need to cover between 10 and 20 per cent of the value as a deposit.
2. Work out a budget
After setting your savings goal, it's a good idea to create a budget based on the maximum amount you'll be able to save each month. Not only will this help you work out a timeline for how long it should take you to reach your target, it will also provide you with smaller monthly goals that you can check off on the way to reaching your total.
3. Set up automatic payments
Once you've worked out a budget, your next step should be to set up an automatic payment that transfers a certain amount of your weekly, fortnightly or monthly pay directly into savings. This takes some of the pressure out of the process, allowing your savings to grow each month without you having to actively deal with it.
4. Rope off your savings
It can be very tempting to dip into your savings every now and then, particularly if the money isn't separated from the rest of your income. To avoid this, consider opening up a dedicated savings account, which will keep your deposit safe and help you accrue interest.
5. Consider streamlining
If you're serious about saving, look for ways to reduce how much you spend each month. That could mean cutting out certain expenses, or even moving back in with mum and dad for a while. Every little corner you can cut will help you reach your goal sooner.
6. Work more
One of the most obvious ways to boost your savings efforts is to take on more work. This could be by picking up a weekend job or volunteering for overtime, but it's vital to know how much you can handle, and ensure you have an appropriate work life balance.
7. Look for other sources of income
Of course, there are more ways to boost your savings than simply working more. If you've got any valuables that you no longer need or use - think clothing, gym equipment, musical instruments - then consider selling them for a boost to your savings.
8. Ask for help
Many first-time buyers in Australia turn to their mum and dad when buying a property, but you can also ask your friends to help you out by choosing activities that are a bit friendlier on your wallet. For example, a barbecue at home on a Saturday instead of a night on the town.
9. Don't beat yourself up
Saving is difficult, and if you're focusing so much on meeting your goal that you feel stressed, burnt out or are struggling to make ends meet, it's okay take a step back. There's nothing wrong with splurging once in a while, so treat yourself to a night out and don't worry too much if it takes you an extra month or two to hit your target.
For more information of securing your first property, get in touch with the Beyond Bank team today.
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